An interesting report has been released by the ratings agency Moody’s, where they have changed their forecast for Athens from “stable” to “positive”.
A good rating like this isn’t given out easily, and city administrations work hard to improve their ratings. This process takes years.
But why do cities do it? The reason is simple: the better the rating, the more willing investment funds are to allocate money to a particular city.
Let’s say you want to build a hotel in a certain city and you need €30-50 million. An investor who agrees to invest such an amount will analyse multiple factors, and the city’s rating from an agency like Moody’s will be one of the key factors considered. This is because the rating encompasses a large number of indicators and forecasts for that city.
So what do cities do to improve their ratings?:
- Develop infrastructure (roads, sidewalks, lighting, etc.)
- Improve the environment (parks, pedestrian and bicycle zones, relocating factories outside the city, and numerous related projects)
- Develop transportation (subway, electric vehicle charging stations, update bus fleets, etc.)
- Fight against poverty (social housing, employment, subsidies, and much more).
- Develop tourist infrastructure (museums, hotels/Airbnb, tours, medical services for tourists, etc.)
There are hundreds of such indicators, and when cities improve, the rating improves as well.
The result undoubtedly affects the cost of real estate in cities. Just look at cities with top ratings and the cost of real estate in these cities (London, New York, Paris, Tokyo, etc. – all have one of the best ratings).
