There are 30 cities or towns among 215 Estonian municipalities (2014). Largest city in Estonia is a capital city, Tallinn, with around 430,000 inhabitants.
Only 2 other cities have more than 50,000 inhabitants, Tartu and Narva. Majority of Estonian towns have even less than 10,000 inhabitants and smallest ones even less than 1,000.
The Association of Estonian Cities represents Estonian cities and towns at national level and provides different kinds of assistance to its member cities.
Some key challenges of urban development in Estonia:
- Remarkable concentration of people and economic activities into largest urban areas and their closest hinterland causing unfavourable conditions of urban sprawl and weakening the development potential of other regions;
- Lower administrative and financial capacity in planning and management of urban integrated development restricts the progress in development of many smaller urban municipalities;
- Urban revitalization is a stronger challenge mostly for cities in North-Eastern Estonia (particularly in former mono-functional mining and industrial neighbourhoods) to resist their high level of unemployment, socio-economic disabilities, insufficient infrastructures, etc.;
- Most of smaller urban centres have low ability to facilitate development of their wider hinterland and prevent out-migration. Those disadvantages are mostly resulting from lack of attractive jobs and qualitative services in smaller-sized towns and also weak urban-rural linkages;
- The urban-rural linkages are needed to be strengthened in all functional areas in terms of enhancement of integrated mobility networks and collaboration between urban and rural municipalities.
National framework for urban development policy
There is no distinct urban policy in Estonia. Common urban development principles and policy instruments belong to the framework of entire national regional policy. Ministry of the Interior is the main responsible body for designing and coordinating regional and urban development issues at national level.
Regional Development Strategy 2020 is the most important policy document that provides the entire framework for regional and urban development incentives at national level.
Concerning the urban development, it has focused on:
- Improving an attractive living environment and international economic competitiveness of 5 Estonian larger urban areas. The aim is to guide the development of the bigger urban areas to the benefit, not at the expense of the development other Estonian regions;
- Stimulating the growth potential of smaller county centres as engines for their wider hinterlands is another urban-related priority axis of the national regional development strategy. Its aim is also to favour more balanced territorial development and weaken the excessive gravity power of people and economies towards the largest urban areas of Estonia.
Under national Operation Programme for the EU Cohesion Policy Funds there will be an extra priority axis for “Integrated and sustainable urban development”, including two sub-measures: one of them is targeted to three larger urban areas of Tallinn, Tartu and Pärnu, and another one is addressed to two largest urban areas of North-Eastern region (Narva and Kohtla-Järve/Jõhvi). Each of these urban areas must compose their integrated development strategy and action plan with selecting the actions to be funded by these OP measures. Eligible activities should be linked to general objectives of the priority axe and its sub-measures:
- Developing public urban space and integrated/sustainable mobility systems;
- Developing child care services in urban sprawl areas;
- Physical, social and economic revitalizing of disadvantaged urban neighbourhoods (special focus for North-Eastern urban areas).
The other smaller county centres (second-tier towns) will be developed by the support scheme “Enhancement the competitiveness of regions”. This scheme is targeted to larger functional areas but has also a strong urban focus, with strengthening the role of second-tier towns for the wider functional areas and improving the linkages and collaboration between towns and their larger hinterlands. Here the main eligible activities should be targeted to:
- Enhancing business infrastructures;
- Developing regional centres of competitiveness and their related business clusters;
- Planning and implementing local incentives for improving the employment and business activity; —Developing transportation linkages between county centres and their hinterland.
Its implementation scheme is general to those of under the priority axis “Integrated and sustainable urban development”.
 In accordance to the Article 7 of the CP funds regulation.
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