The cultural sector of a city contributes in a variety of ways to promoting the livability, vitality and sustainability of the cities in which it is located. In this paper, we consider the sorts of economic functions performed by the cultural sector, conceptualising the city in economic terms as a conglomeration of different types of capital with a particular focus on cultural capital. We consider cultural capital investment projects of various sorts, indicating that both the economic and the cultural evaluation of such projects is amenable to the application of the familiar tools of cost-benefit analysis. The paper goes on to discuss measurement issues when such tools are applied to the assessment of a project involving investment in urban heritage. Finally, the issue of sustainability is considered with reference to the notion of culturally sustainable development, which implies the long-term management of cultural resources such that the basic sustainability principles of intergenerational and intragenerational equity are appropriately served. In the urban context, these considerations suggest that the concept of the ‘sustainable city’ needs to be expanded to incorporate conservation of the city’s cultural capital in both its tangible and intangible forms.
Keywords: urban development, cultural capital, heritage investment projects, culturally sustainable development