Urban Reverb: Your Smart City

Urban Reverb Episode 8: Your Smart City

Anthony: Hello and welcome to Urban Reverb, the official podcast of the Smart Cities Marketplace, a European initiative financed by the European Commission. I'm Anthony Colclough. Almost a century ago, we see the emergence of a phrase later made famous by baseball legend Yogi Berra: ‘The future is not what it used to be.’

Now in the 21st century, we can comfort ourselves with some small assurance of consistency: the future remains unreliable. A decade ago, smart cities were a shiny concept of high-tech gadgets and futuristic technology. Lasers, apps, and flying cars would save our society. Now, in 2025, the idea of the smart city has evolved into something far richer: a story of people, resilience and learning from rapid change.

In this season finale of Urban Reverb, my illustrious guests will reflect on how the smart city idea has matured. We'll talk about how it went from a nice-to-have novelty to a must-do necessity, how the just transition is putting citizens at the center, how communities are taking charge of energy, and what lies ahead. Joining me with their insights are Stefan Mosser, Han Vandevyvere and Paolo Machado.

Stefan Moser: Hello, I'm Stefan Moser, Head of Unit at the Housing Task Force in the European Commission. We are a coordinating body to bring together the various policies related to housing, but also work with member states, the European institutions and stakeholders to see how we can help from the European level in addressing the housing crisis.

Han Vandevyvere: I'm Han Vandevyvere. I work for two institutions, Vito, the Flemish Belgian research and technology organization, and the Norwegian Technical University. I work on climate action plans for cities, the European unions, climate goals, positive energy districts; and via the Smart Cities Marketplace also on financing solutions for those challenges.

Paolo Machado: My name is Paolo Machado and I work in Guimarães Municipality, a northern city in Portugal, and my role is coordinator of the Energy Efficiency Cabinet. And we mostly do energy management for municipal buildings, public lighting. We also do strategic and management work regarding climate change mitigation, and renewables.

Anthony: My guests today confirmed a trend that I've detected over the 10 years that I've been working on smart cities: the mantle of smart city is now first and foremost one earned by cities that design their future not only for the people that live in and visit them, but also with those people.

Paolo Machado: When the idea started, we thought of super futuristic movie style things in which everything's going to be remotely controlled and that we could install the smart system overnight. Now we know that's not true.

Han Vandevyvere: The world has changed a lot over the last five to 10 years. The context of working for smart cities has equally changed a lot. There have been a few shocks. The energy crisis of 2022. From cities’ new shock, I would call it the Trump shock, I think there's a strong argument for cities to say: ‘let's build more local resilience, gear up the local economy, circularity, recycling materials, repurposing products, having local services,’ so that you can better resist global shocks, whether they're environmental, political, or other.

On the other hand, as broader conditions become more pressing in terms of climate effects, extreme weather events, materials and resource pressure and autonomy, water being more and more under pressure, we see the European Commission has stepped up its efforts. And cities are also the laboratory where the solutions are being experimented. 

Stefan Moser: The big challenge for cities is to find the right balance between the different objectives of citizens. For that, we see the need to have an intensive and comprehensive dialogue. What are the objectives? What are the needs? What is pressing in a city? In which direction do people want the city to evolve? There are different views, but it's important to do the stocktaking, this analysis of what actually people wish to have in their environment, what should improve, and see how they can help realize and support people in their endeavors.

Paolo Machado: When we started to work on sustainability, we knew that we needed to engage the community to do so. The municipality created a structure, which we call the Landscape Lab, in which the municipality, two universities and environmental education teams get together to make Guimarães a more sustainable city. At the current moment, it's the Portuguese city with the highest PV [photovoltaic] install of power, and I like to believe that it has something to do with the work that we do with engagement. I'm very happy with that.

Anthony: So we've got the first component of a smart city: engaging local people. When you engage people, what do you tend to discover? They want to create smart cities by developing their most fundamental building blocks, starting with their homes, their districts, and their communities. A great example of this kind of engagement is what's called a positive energy district.

Han Vandevyvere: The idea of the positive energy district was: can we, at that district scale, arrive at a level where the district, at least on an annual basis, can provide for its own energy? We've seen through a lot of projects that the district scale is a very interesting scale of intervention because at the district scale, a lot of things come together. The concept of positive energy districts has been diversified in different solutions, which means that in dense urban areas, some of the needed energy can be imported from outside. In other areas that could probably be a real surplus of energy.

Stefan Moser: The objective is to see it as part of a broader systemic issue – how to create, recreate, and take forward urban environments; inclusive environments, but also sustainable environments from a quality perspective. Energy climate objectives, but also environmental green cities, connected cities where there is a high quality of living, but also inclusive living between different inhabitants. And to link that to issues such as mobility or very much how to develop urban spaces.

How should cities look in the future? What are more sustainable ways of living, but also more inclusive ways of working together and living together? Mixing more than has happened so far.

Han Vandevyvere: In the whole cycle of smart cities and communities, projects that were granted by the European Commission culminated in the last groups of projects that were requested to build positive energy districts.

You put a program and you start a process and then you're going to test out things. You're going to invest, you're going to correct on the way, in a time span of five, 10, maybe 20 years, you will approach the PED [Positive Energy District] status. But it's not something you can build in a few years, and it's very important to realize that that whole process pillar is really fundamental.

Anthony: Districts are made up of communities. And a fundamental element of delivering smart and sustainable positive energy districts is zooming in to create what are called energy communities. This is work that they're undertaking in the Portuguese city of Guimarães. I asked Paolo for a little context around the action in his city.

Paolo Machado: Guimarães is a very historical city. It's the first city of Portugal. It's called the Cradle of the Nation because the first King started here conquering…

Anthony: Okay. I got a lot of context. Let's fast forward a couple of hundred years.

Paolo Machado: And then in 2012 there was strong municipal and collective work to become European Capital of Culture. The main motto for that candidacy was: ‘I belong, so we belong.’ The city was already trying to harvest this sense of community. Also, the city in parallel started its sustainability campaign, firstly by entering Covenant of Mayors and trying to bring the sustainability to the city with the SEACAP.

That SEACAP also tried to implement the community engagement since the beginning. In more recent times, Guimarães became a Mission City of the100 Cities Mission. This was a big thing for us. It brings more commitment, it brings us to work more towards new incentives, and also we did our candidacy to the European Green Capital.

So Guimarães is going to host the 2026 Green Capital. This candidacy and work brought us a vision, a multi-sectoral vision in which everything is integrated. And this is due to a very strong ecosystem that was mounted here in the municipality, which brings together municipality, technicians, politicians, universities, research centers… and obviously we cannot talk about sustainability, decarbonization and all of these aspects without talking about energy communities.

Anthony: The Smart Cities Marketplace has worked with Guimarães to actualize these ambitions.

Paolo Machado: So our coming to the Smart Cities marketplace, it's the result of all the work I mentioned earlier. When you do this kind of networking, you end up meeting people and creating movement.

Han Vandevyvere: One strategy that we now firmly adopt in the Smart cities Marketplace is the ‘go local’ approach. That means we really go on site, we make sure we have experts available that speak the local language, know the local context. And then we provide, for example, technical assistance, to go on the spot, look at the investment or the intervention that is planned, check the maturity level of that, look how big is the gap towards financing, and then start to work on it in a very concrete way.

Paolo Machado: The Smart Cities Marketplace also connected with other experts to get specialized technical help. We went with our Energy Community project and then received help from experts from Portugal. This really helped us. At the end, we even have energy communities that were not promoted by the municipality because even the energy players started to promote them.

For instance, I can say the football stadium as an energy community, and it's not promoted by the municipality, but the municipality started to introduce all of these ideas since the early days, and so I think that got stuck in the city stakeholders.

Anthony: So smart cities contain smart districts, and those districts contain smart communities. As we zoom our audio microscope even further in, what do we find? Smart buildings and especially homes have become key.

Han Vandevyvere: It's also a very good thing that currently the Commissioner for Housing is also the Commissioner for Energy because those two are fundamentally linked. It's really good to have the two domains very close to each other and interlinked in policy terms. We know that we need to retrofit many buildings to reach climate goals. It's a matter of affordable housing, preparing the building stock for sufficient quality of life, for energy efficiency, renewable energy production, so that also, for example, the motor behind energy poverty is taken away. The European Union is looking into programs, for example, the Citizen Energy Package on the one hand, but also on affordable housing.

Stefan Moser: Housing is an essential requirement for every one of us. Citizens are struggling more and more, especially when they have lower than average incomes, but also at the beginning of their career, essential workers and people in vulnerable situations, homeless people and others really struggle to find a place.

This has become a very strong societal concern because it is no longer an inclusive society, and stands in the way of people realizing their dreams, finding the appropriate jobs. People cannot move to where the jobs are, and therefore limit their life chances. And that's why the president of the European Commission mandated Commissioner Dan Jørgensen to take care of housing and work with member states, European Parliament and the other institutions to address this issue, and also to create a new task force in the Commission to support our commissioner on that task.

I think the more such models can be owned and organized by including the inhabitants, the better it is because it integrates the people as owners, even if they're not legal owners, but as people with a sense of ownership and responsibility for their district, for their neighborhood.

If active communities can be involved in the construction, design and later on the management of a neighborhood, it is likely to be more successful. Cooperative models are, I would say, giving such an active role to the inhabitants themselves and are therefore a much more valuable. 

Paolo Machado: So, we did the citizens assemblies. And I was invited to do a presentation in which I presented the concept of energy communities. Most people didn't know this concept by the end of the session, what they delivered to make in Guimarães? An energy community. I told how an energy community works, how it could benefit them, and by the end, they delivered an energy community project, and we are going to be financed in €100,000 to implement an energy community. Sometimes people don't know. If they're not aware, they cannot act for change. 

Anthony: Few things are more sacred to people than their homes. And any urban strategy that involves people's homes needs to ensure that those people are fully behind the change. How do we make sure that everybody is brought along?

Stefan Moser: If there's no proper consultation upfront, opposition coming up later on is much more likely to happen than if people have basically been taken already along the process in defining what actually should be the development.

I think financial support will have to be targeted to the most vulnerable people, those who can otherwise not take care of themselves. When it is decided to improve a neighborhood, it must be ensured that there's a protective mechanism so they can continue living there and don't have to move away.

For instance, the level of rent, there's a kind of payment to the investor that would go only to a certain level of increasing the rent after a renovation, and the rest would have to be covered as a public good contribution. How do we improve neighborhoods which need to be better integrated in society, in the design and creation of new housing units, which in should be modeled in a different manner, often mixed throughout the city and not be concentrated in certain parts of the city, which develop then into problematic neighborhoods.

So it brings together financial support, planning, support, and a vision for the city where people feel proud that they can identify with and don't feel somehow put into a margin. Bring together different social backgrounds, workplaces and housing units, to avoid the segregation between where you work and where you live, to reduce the commuting time and connect people well to their workplaces. And of course, it needs to be seen also in the context of resilience, adaptation to climate change, greening, better air quality and protection of the health of people.

Anthony: These are indeed laudable aims. There are challenges for cities that would take this path. For example, when working on energy communities, Guimarães discovered that procurement regulations created a major hurdle.

Paolo Machado: In theory, it's pretty much fabulous. But the problem is when we mesh it with the public procurement regulations and laws, things don't come up that easy. Nowadays, it is a challenge, in terms of the law, for us to establish an energy community with other stakeholders outside of municipality. As a municipality, I cannot participate in an energy community with a citizens association or with the private industry because the laws of procurement don't allow us. Well, I can still use the idea of community and establish a place where I can produce energy and distribute amongst other places.

So that's what we did in Guimarães. We have this problem, but we are going to solve it another way. We think the law is going to be corrected and in the future we could add some external stakeholders, citizens, businesses, to our community.

Anthony: Another big issue, and one that longtime listeners will know the Smart Cities Marketplace was set up to help ameliorate is: money.

Han Vandevyvere: The European Commission has decided to set a social climate fund intended to redistribute means so that people most affected by energy crisis and energy systems get a fair chance and support. Just to give you some numbers as a comparison, the goal of the social climate fund is up to something like €100 billion, which is a huge amount of money. If you compare that to the challenge ahead, we made an estimate of the cost of preparing the Flemish building stock for 2050 and the figure is grossly around €200 billion euros just for 6 million people. So you understand the magnitude of the problem. And that is why it'll be so important to leverage a lot of private money. 

We need to start to look to new schemes. Many building owners are not able to pre-finance their retrofits. They don't have the borrowing capacity. You need to unburden building owners and you need to foresee a hundred percent pre-financing so that in the long term, those investments can be paid back. And you would need a lot of private investment. We would need regulatory changes to afford that. So private financing with public guarantees, that's one thing where we should see changes.

And then you can think also about alternative financing mechanisms that allow you to redistribute means or make sure there is sufficient pre-financing so more vulnerable target groups can also do those investments that are so much needed. And then you can start to think about climate funds, climate impact bonds, and the like.

Stefan Moser: I think what I recently came across is a very important consideration. It's not just about the cost of construction, the cost of renovation, but also the avoided cost of social problems, crime problems, drug problems. Basically, the benefit of social inclusion and that requires a broader perspective is important to appreciate the benefits from renovations.

Anthony: Now that we've zoomed in to the point of almost cracking our lens, it's time for another filmic transition. We'll pull the camera back at breakneck speed. So that first the home, then the district, then the city itself, each shrink one by one to tiny specs. From this enormous distance, we see another feature that makes them smart: The writhing, thriving nebula of connections sprawling out between them and the spaces that surround them.

Stefan Moser: What is a very important aspect is connectivity, mobility, even in places built a bit further away from the attractive parts of the city, from the city center, that they don't feel cut off, that there's an efficient transportation link or social infrastructure being built close by.

I mentioned schools and daycare facilities, et cetera. But I think it's also a cultural issue, that cultural venues are accessible to the people. And I think one part of the solution is to focus not only on the metropolitan areas, but rather the contrary, nearby rural areas, but also places further afield. See what can be done to stop and reverse rural decline in terms of attractiveness of living there.

Schools, swimming pools, cultural centers. They're of course, partly also under public control, and I think it's part of the problem that they are sometimes neglected and even close down because there are not enough people anymore. It's a vicious circle. So what you mentioned as urban development, smart cities, I would even say smart regions and regional development plans, not only urban.

Anthony: With all this zooming around, I may have managed to knock the original question out of your head. A smart city, as I believe my guests today have gotten across, is something that remains to a degree ineffable. It is something that the people that make up each place must decide together for themselves.

Nonetheless, I challenged my guests to come up with a succinct definition, and I think you'll agree, they did pretty well.

Han Vandevyvere: What I have seen in European projects is that when you put people working on the ground in different cities, the local experts together in a project, and they start to exchange on their challenges, on the opportunities, on the ways they fix certain problems. And that's what we need to really keep in mind in Europe, is that together and by collaborating and by exchanging and by learning together, we are smarter and stronger.

Paolo Machado: For me, smart is something that's simple. It's connective and active. This is how I see the smart city concept, the energy community, the public lighting, the traffic, the mobility – everything must be connected in a way that you support the wellbeing and that you support the daily situations that our municipality faces.

Stefan Moser: I would say a smart city is one where everyone feels well-integrated and well-connected using technology, but also open society models, integrated solutions, and where there's a two-way communication between the city and citizens. And so that's very important that there's a kind of ongoing dialogue, not just top down, but also bottom up and both happening at the same time.

It requires active facilitation, including with the city authorities, to create regular exchanges in terms of what can be improved because it will never stop. Nothing will be perfect forever. So I think that's also important to build in from the start a mechanism to improve further, to take it along, and to take up suggestions from citizens.

Anthony: I am feeling a little smarter already. That's it from me and from the Urban Reverb Podcast for now. So you can tuck yet another season under your belt. However, that's certainly not it from the Smart Cities Marketplace. If you want to stay up to date, get involved, or listen again to this and previous episodes, check out smart-cities-marketplace.ec.europa.eu. That's also where you'll find the transcript of this and other episodes of the podcast. The Smart Cities Marketplace and this podcast are an initiative of the European Commission made possible through European finance. Thanks for listening.