Financial mechanisms for attracting investments in development projects as a factor of urban growth

Abstract

The article examines financial mechanisms for attracting investments into development projects as a key factor in the growth of modern cities. Investment in urban infrastructure and real estate is a crucial instrument for stimulating economic growth, enhancing the quality of life, and ensuring sustainable development of urbanized areas. The study analyzes the main sources of financing for development projects, including traditional methods such as bank lending, government subsidies, and bond issuance, as well as modern financial instruments such as crowdfunding, venture capital, and digital financing platforms. The advantages and risks of each capital-raising method are identified, along with their impact on the effectiveness of urban development project implementation. Special attention is given to the role of public-private partnerships in financing large-scale development initiatives, enabling the attraction of private capital for the realization of infrastructure and socially significant projects. The paper explores the mechanisms of interaction between government institutions, financial organizations, and development companies aimed at minimizing risks and increasing the efficiency of investment resource management. The influence of macroeconomic and regulatory factors on the investment dynamics in the development sector is investigated, including tax legislation, monetary policy, availability of financial resources, and the overall investment climate. The article also presents international experience in applying financial mechanisms in development projects, covering urban infrastructure financing strategies in Europe, the United States, and Asia. The prospects for introducing innovative financial technologies such as asset tokenization, green bonds, and digital investment platforms are analyzed. Strategic directions for improving investment attraction mechanisms in urban construction are proposed to enhance the investment attractiveness of cities and ensure the balanced development of urban space. Recommendations are developed for public authorities, financial institutions, and development companies regarding the optimization of financing processes and the adoption of modern approaches in investment attraction for urban development.