Urban Dimension of U-Space: Local Planning Considerations for Drone Integration

Highlights

What are the main findings?

• Identified a core planning conflict between permissive airspace usage and retaining area functions.
• Highlighted potential legitimacy issues from insufficient consideration of local political and civil society interests.

What are the implications of the main findings?

• Strengthening the role of regional and local authorities in the multi-level governance for U-Space.
• Investing early in stakeholder participation formats, guaranteeing transparency and adequate responsiveness to citizens’ concerns.

Abstract

U-Space, the European Union’s legal framework for enabling drone traffic in low altitude, has implications extending beyond airspace management, particularly on the sustainable development of urban areas. This article presents a case study involving regional and local level representatives, examining anticipated concerns and strategic interests, as well as managing requirements in urban U-Space planning. Following a three-stage capacity building process conducted in the German federal state of Hamburg, the results specify ambitions for enhancing economic attractiveness coupled with locally embedded visions for improved public service provision. Instruments that have shown apposite in the given setting to address concerns surrounding public order and security, as well as the impairment of area functions, are presented. The challenges of implementing U-Space in alignment with societal expectations are outlined. Based on the discussion of these findings, recommendations for local-level capacity-building policy and the multi-level governance of U-Space are derived.

1. Introduction

The safe and efficient integration of drones into airspaces is a fundamental prerequisite for the development of a European single market for drones and its competitiveness on a global scale [1]. With a long-term view of this goal, the regulations for the operation of Uncrewed Aircraft System (UAS) were harmonized across Europe in 2019 [2] and further strategies were defined to promote research and development for civil and military applications [3,4]. Supported by these measures, the volume of the European drone market and the number of commercially deployed drones are both expected to evolve between 2020 and 2030 from around 5 billion EUR to 14.5 billion EUR and from at least 100,000 to a maximum of 800,000 UAS [5], respectively.

At the local level, in particular, there is little awareness of the need for action that can go hand in hand with these political visions and economic ambitions [6,7]. On one hand, for an increasing number of municipalities, metropolises, prefectures, regions, and other entities considered comparable within the European multi-level governance framework, there is growing interest in how to capitalize on Urban Air Mobility (UAM) and its innovation potential for urban areas [8,9,10]. On the other hand, municipalities are increasingly confronted with a planning responsibility to balance between private and public interests in the exploitation of urban airspace.

In Europe, this challenge is exemplified in the designation of so-called U-Space airspaces. These comprise geographical volumes within which Uncrewed Traffic Management Systems (UTMS) shall enable the routine operation of a large number of drones. The corresponding Implementing Regulation (EU) 2021/664 of the European Commission (hereinafter referred to as the U-Space CIR) has been directly applicable to the Member States since January 2023 and is characterized by a clear vertical dispersion of authority [11]. While the European Union Aviation Safety Agency (EASA), as a supranational body, defined the foundational regulatory framework, the competence of designating U-Space airspaces lies with the European member states. In accordance with Article 18(f) U-Space CIR, the nationally designated competent authority should involve those entities at the national, regional, and local levels whose interests and concerns will be affected by these restricted airspaces and the drone traffic organized within them [12]. This is complemented by a horizontal dispersion of power to private, non-state actors, such as U-Space Service Providers (USSPs), who will be authorized to perform core traffic infrastructure functions for customers, like flight authorization and geo-awareness services [13].

Local public authorities and administrations may hold a critical position in this multi-level governance, given the anticipated impacts of urban drone integration on local economic development, urban planning, and political and social discourse [14]. However, the extent to which municipalities can cope with the associated opportunities and risks has not yet been investigated. This research addresses the following questions:

• What are the public concerns and strategic interests of municipalities regarding U-Space?
• What capacities are required for effective municipal participation in the designation and management of U-Space airspaces?
• How can municipal public concerns and strategic interests be effectively incorporated into U-Space multi-level governance frameworks?

Results are based on a case study, which was conducted in Hamburg, Germany between September 2022 and January 2023. The method includes a UAM strategy workshop, an authority enquiry on the matter of U-Space, and a Planning Workshop, in which the designation of a fictitious U-Space was tested through the involvement of 14 different public authorities and subordinated bodies. In light of the pending transposition of the U-Space CIR into national law at the time of the study, all formats are aligned with the Acceptable Means of Compliance (AMC) and Guidance Materials (GM) published by EASA with reference to the EU implementation of Article 18(f) U-Space CIR [15].

The research is expected to qualify the social science discourse on sustainable urban drone integration by providing relevant considerations on the multi-level governance of UTMS/U-Space. To facilitate this ambition, Section 2 introduces the European U-Space concept with reference to the local level. In Section 3, the methods of the study and the data collection are described. The results are presented in Section 4. Central observations are discussed in Section 5, with closing remarks and limitations presented in Section 6.

2. Background: European U-Space

The public and commercial use of drones is steadily increasing, particularly due to their high efficiency and mobility in data collection, leading to manifold application potentials in urban built environments [16,17]. Public organizations already utilize this technology to support various tasks, such as the maintenance of public infrastructure and applications related to maintaining order and security [18,19]. In the private sector, great potential for scaling is anticipated in the use of drones for automated logistics, although the market is not yet mature [20,21,22]. Likewise, viable business models for the operation of electric and hybrid vertical take-off and landing (VTOL) aircraft to complement urban and regional passenger transport are being sought [23,24,25].

A technical prerequisite for the urban integration of these services lies in the safe and orderly operation of UAS and VTOLs in airspace up to 150 m. Currently, this airspace is the habitat of birds and used by humans for air rescue, police work, hobby flying, and as a transit space for crewed aviation [26]. With the expected increase in drone applications, not only does the potential for conflicts related to the public resource of airspace increase, but also the potential for accidents between airspace users [27].

2.1. U-Space Stakeholder

In light of this, the European legislator in 2021 provided member states with a novel instrument, allowing for the designation of U-Space airspaces. Regular UAS operators intending to fly within these designated geographical volumes are required to register with and utilize an external traffic management system [12]. It shall be provided by certified USSPs, who must, at minimum: (1) collect and communicate the identity of other UAS operators and the location and flight path of their drones during operations; (2) provide information on operating conditions, airspace limitations, and existing time restrictions; (3) ensure conflict-free operations with other UAS operating within the same airspace volume; and (4) warn operators of potential air traffic in the vicinity.

These four basic services are expected to streamline legal and technical requirements for drone pilots, particularly for more complex operations Beyond Visual Line of Sight (BVLOS) over complex areas such as populated ground or industrial zones. Additionally, registering drone flights with the appropriate USSP should expedite approvals and provide greater planning certainty for operators [28]. The governance framework thereby envisions market competition among multiple USSPs within a designated U-Space airspace, supporting the legislative goal of a competitive market of private actors to achieve scalability and efficiency in drone utilization [29].

To implement this system, relevant drone traffic information must be shared among USSPs via a Common Information Service Provider (CISP). Information will be supplemented with safety and security-related data from sources such as crewed aviation, air navigation service providers (ANSPs), military entities, and authorities responsible for security tasks. For instance, all USSPs operating in a U-Space airspace might receive common information regarding the temporary closure of a flight corridor due to emergency operations and must forward this information to their customers.

U-Space encompasses these core procedures and functions. It relies on physical components such as cell towers and servers, as well as its digital components such as data networks and dedicated software platforms. The system is projected to expand significantly in capacity and functionality over the next decade and, through this, is expected to enable the safe, efficient, and increasingly automated operation of a high number of diverse types of UAS and VTOLs in lower European airspace [29].

2.2. U-Space Infrastructures and Sustainable Urban Development

In light of this, UTMS/ U-Space exhibits similar characteristics to any other traffic infrastructure [28]. Consequently, a significant association with common sustainability objectives must be assumed [29] The European Commission’s Drone Strategy 2.0 accentuates foremost economic sustainability by demanding the efficient utilization of airspace as a limited resource and equitable access for drone operators [30]. U-Space economic benefits may comprise the acceleration of travel and delivery times through, for example, fast operational clearances for aerial transportation, able to optimize urban economic cycles and strengthen the competitiveness of companies and regions [31]. Despite changes in urban consumption patterns through the near-real-time availability of consumer goods [32], induced demand for transportation [33] and increased mobility comprise controversial economic effects associated with U-Space [34].

From a social sustainability perspective, the designation of U-Space airspace may have implications for the distribution of welfare in the area beneath. Research on the introduction of UAM on regional spatial and social equilibria suggests changes in property and rental prices, land use patterns, and overall energy consumption [35,36,37]. Drone traffic in U-Space may induce a disproportional exposure of certain urban areas to low-level air traffic consequences, such as visual pollution, noise disturbances, or safety risks [38,39]. Scientific discussion on UAM applications further draws on the affordability and accessibility of drone delivery [40] and air taxi services [41,42]. U-Space Services may add to higher-end customer prices until envisioned flight operation automatization potentials are realized. Lastly, the different perceptions of citizens regarding the risks and benefits of UAM services in the spectrum between public healthcare and private consumerism [43,44] suggests that the acceptability of U-Space will be dependent on both the type of drone applications it enables and the way aerial traffic is perceived by the local population.

From an ecological point of view, emphasis has been given to the resource and energy demands associated with both operating drones locally and establishing global production and supply chains. Following the Avoid–Shift–Improve paradigm [45,46], operational energy efficiencies of UAS and VTOLs compared to conventional modes of transport have been validated only in a limited set of scenarios [47,48,49,50]. Furthermore, the production and subsequent recycling of aircraft, batteries, and other electronic components is argued to pose significant environmental challenges both within and outside the context of local UAS deployment [51]. Accordingly, an undifferentiated provision of U-Space services for all kinds of UAS and VTOL services must be seen to negatively impact environmental sustainability ambitions as well.

2.3. U-Space Multi-Level Governance

The ability of municipalities to commit to these insights is closely linked to their role in the multi-level governance of U-Space. The following section thus examines the three planning phases proposed in the U-Space GM [15].

Planning Phase: According to the U-Space CIR, the planning phase commences with the nationally designated competent authority initiating the process for designating a U-Space airspace. The final decision of the competent authority will be informed by a prior hearing process that addresses the following questions:

• Is designating a U-Space airspace necessary for drone operations to ensure safety, privacy, and environmental protection in the area?
• Within what boundaries should the geographical volume be designated?
• What interests and concerns must be considered when designating the airspace?
• What operational and technical airspace restrictions should be established?
• Which services, beyond the four basic services, must USSPs provide?

Local governments may be enquired to represent their stakes in the hearing. As depicted in Figure 1 this presents an external coordination and harmonization challenge with actors such as Military and Security Authorities, the national Aviation Authority, ANSPs and CISP, as well as Industry—including USSPs and UAS operators. Likewise, internal coordination may be required between various local-level stakeholders representing urban development, safety and security, economy, transportation, environment, and civil society.

For local authorities, the hearing process is suggested to be the only opportunity to co-design airspace planning in their urban area before the competent authority designates the U-Space airspace. Considerations may include the protection of nature, traffic safety concerns, noise mitigation, and political and civil interests. The GM recommends public involvement in this stage [15]. The weight given to local interests and concerns against partially superior public and various private actors depends on how European member states implement the multi-level governance mechanism of the U-Space CIR. That is, whether local authorities have an active, design-oriented role or a more passive, procedural role limited to consultation and information.

Implementation and Execution Phase: Once the U-Space airspace is designated, local bodies are assumed to have limited influence over its configuration or reconfiguration. The U-Space coordination serves as a point of contact for local bodies, evaluating submissions and requests. Dynamic adaptations to the U-Space are possible in response to safety and security events [15]. During U-Space operations, local authorities are suggested to ensure drone operator compliance, report potential airspace hazards, and report safety and security-related events on the ground [28].

Revision Phase: This phase begins after a predefined, recurring period. It may involve a multi-level political coordination process, including local authorities, and an assessment of societal acceptance of the U-Space. Data collected from ongoing UAS operations, along with submissions and recommendations, are forwarded to the competent authority. This information informs decisions regarding the maintenance, restriction, or reshaping of the U-Space airspace [15].

3. Materials and Methods

To test this conceptual framework at the municipal level, a three-stage method for stakeholder participation was applied, addressing various authorities, administration bodies, and subordinate entities in the Free and Hanseatic City of Hamburg, Germany between September 2022 and January 2023. The process, herein referred to as the Hamburg case study, was part of a national research project (cf. back matter funding information) and aimed to foster technological, social, and institutional learning among participants and the funding body within their respective areas of responsibility [52].

3.1. Framework Conditions of the Case Study

First, Hamburg plays a special role in Germany’s federal system, as the city-state is both a municipality with local-level institutions and a federal state with regional-level institutions. For example, Hamburg has its own state aviation authority and its own responsibilities for issuing drone operating licenses. The spatial and structural proximity of different administrative levels can have an influence on the interpretation of the results of the case study and their transferability to area states in Germany and Europe.

Second, at the time of the case study, the European U-Space CIR had not been transposed into national law in Germany. This led to legal and procedural uncertainty surrounding the interpretation of Article 18(f) and thus the design of the stakeholder formats. The challenge was addressed by strongly aligning with the relevant AMC and GM [15]. Close cooperation with the project partner, the Hamburg Ministry of Economics and Innovation (BWI), ensured the integration of methodological and planning considerations with applicable administrative and procedural requirements.

Third, with Hamburg being a member of the UAM Initiative Cities Community (UIC2) since 2019, initial personnel responsibility and awareness regarding the European drone legislation were present at BWI and its proxies. These framework conditions may have been conducive to the acquisition of participants and may unfold differently in testing such an inter-authority coordination process in other urban regimes.

Fourth, a certain consistency in terms of personnel during the Hamburg case study suggests a growing level of knowledge about U-Space and may speak in favor of the quality of the obtained data. Six Hamburg institutions were represented in all formats. Twelve Hamburg institutions were represented in at least two formats. The detailed composition of represented institutions can be found in

Table 1. Represented Institutions over the course of the Hamburg case study.

Represented Institutions	(A) UAM Strategy Workshop	(B) U-Space Authority Enquiry	(C) Planning Workshop
State Authority for Economy	x	x	x
State Authority for Urban Development	x	x	x
State Authority for Mobility	x	x	x
State Authority for Home Affairs	x	x	x
State Authority for Environment	x	x	x
State Authority for Culture		x	x
State Authority for Education		x
Hamburg Governing Council			x
District			x
Police	x		x
Fire Brigade	x		x
Port Authority	x
State Organization for Roads, Bridges and Waterways	x		x
State Office for Geoinformation and Surveying	x		x
Cluster Management Digital Mobility Transition	x
Public Film Funding Organization			x
Cluster Management Aviation (Co-Facilitation)	x		x
Academia (Facilitation)	x	x	x

.

3.2. UAM Strategy Workshop

The administration of the internal UAM Strategy Workshop aimed to (1) initiate an initial exchange on UAS applications in the overall city interest, (2) outline the current political and legal framework regarding urban UAS applications, and (3) create a common understanding of the tasks and challenges facing the use of UAS in Hamburg.

To achieve these goals, a half-day face-to-face event was organized in September 2022 at the public Hamburg HafenCity University, and three round tables were set up with the aforementioned thematic focus areas. Following the World Café method, the tables were each moderated by an external person, who also supervised and documented the results [53]. Twenty-two participants from nine Hamburg institutions came together to exchange knowledge and ideas.

3.3. Authority Enquiry on U-Space

The following authority enquiry aimed to interrogate representatives of public administrations and subordinated bodies on (1) their interest in using U-Space services, (2) concerns of public interests that they anticipate becoming affected by the designation and execution of U-Space, and (3) their expectations of tasks and responsibilities to be expanded within their scope of responsibility to ensure the orderly administration of a designated U-Space.

For this purpose, a one-hour-long online Jour Fixe was used in November 2022, which existed in the city before the Hamburg case study, and was attended regularly by dedicated authorities and network partners of the city. In this context, the participants were informed about the topic of U-Space and the associated fields of action for the first time by means of a video “https://www.youtube.com/watch?v=1202uugIkwY (accessed on 23rd October 2025)” and a keynote speech (cf. content of Chapter 2), followed by an open discussion among the participants. The data collection was carried out as an official follow-up enquiry via e-mail, which was sent to all bodies that had been identified as relevant prior to the process [54]. Seven authorities have submitted comments regarding the enquired questions.

3.4. U-Space Planning Workshop

The consequent U-Space Planning Workshop used realistic but fictious planning materials and had three main goals: (1) Clarify the role of local authorities in designating a local U-Space airspace vis-à-vis Article 18(f) U-Space CIR; (2) Identify and address potential conflicts between permissive drone operations within a respective area and public interests in a collaborative inter-authority process of coordination and planning; and (3) Raise awareness among the authority representatives about their bodies’ responsibilities in managing the designated U-Space.

To this end, a full-day event was organized in January 2023 at the Hamburg HafenCity University, which was attended by 28 participants from 14 authorities, administrations, public subsidiaries, and network partners. The event began with an introduction to the legal basis according to the requirements for a coordination process between the responsible designating authority and the local or regional level, as defined in Article 18(f) U-Space CIR by the project partner BWI.

The second part of the event tested a municipal coordination process for designating a fictitious U-Space airspace over parts of Hamburg Wilhelmsburg, an urbanistically diverse district (see Figure 2). Participants were given the scenario that the designating authority had already initiated the procedure and that local authorities needed to conduct a separate examination of specific areas within this potential U-Space. Seventeen worksheets were presented, each depicting areas of increasing urban complexity and escalating coordination requirements among authorities. In addition to a factual description and illustration of each area, the worksheets included fictitious statements regarding their planning relevance for developing different flight paths and the expected number of flight movements. For relation, the projected proportion of commercially used drones in Germany by 2030 was scaled to match the ratio of Hamburg’s population to the German population. The worksheets are included as supplementary data with the manuscript.

It is worth noting that most worksheets pictured geographical areas that, at the time of the case study, have been covered by the National German Air Traffic Ordinance (LuftVO) and thus were subject to specific operating conditions for UAS, e.g., public administration buildings, a nature reserve, an industrial site, waterways, and traffic junctions [55]. In these instances, the participating authority representatives could decide on the appropriateness of operating conditions and adjust if necessary. To further encourage open discussion, worksheets also included culturally or socially sensitive locations not regulated in Germany such as a sport pitch, a cemetery, or a public beach.

Twelve factsheets were processed during the planning workshop. Additionally, notes were taken by the co-facilitation from the participant observation [56]. Participants were asked to document (1) which authority or administration should be involved in evaluating the specific request for drone operations over the area; (2) which public concerns or interests the stated drone operations would affect; and (3) which planning instrument would be most suitable for resolving potential conflicts of interest between efficient and free airspace use, and the safeguarding of relevant protected assets and local concerns.

4. Results

Drawing on the documentation of the three formats of the Hamburg case study, stated strategic interests regarding a local U-Space, public concerns affected by it, and perceived legal/administrative requirements to be met for U-Space designation and management are presented. References in brackets refer to the format or formats in which the observation was documented [(A) = UAM Strategy Workshop; (B) = U-Space Authority Enquiry; (C) = U-Space Planning Workshop] but not to singular institutions or representatives as this was not intended by the organizations involved in the Hamburg case study (cf. back matter data availability statement).

4.1. Municipal Strategic Interests

The UAM workshop brought together a large number of stakeholders with sector-specific interests regarding both the application of UAS and their admission. Authority representatives expressed a general will towards utilizing drones internally to accelerate strategic cross-sectoral goals, e.g., for ground traffic flow analysis in support of smart traffic management or for the measurement of emissions from moving ships to enhance environmental monitoring. In the context of law enforcement and security, drones were suggested to be increasingly relevant for evidence collection, surveillance, and event monitoring, such as for sporting events or demonstrations. Drones were also envisioned to play a vital role in emergency response, exemplified by specialized fire service applications and disaster prevention efforts like dyke monitoring, potentially replacing helicopters for tasks such as those employed currently along the Lower Elbe River (A). Representatives of public subsidiaries emphasized their conviction that UAS will become increasingly relevant for fulfilling their duties, citing examples such as managing the Hamburg port area, inspecting public infrastructure like bridges and roads, and collecting up-to-date geospatial data on behalf of upstream authorities (A).

Regarding the promotion and admission of UAS and VTOLs to the city, the discussion on potential applications revealed central aspects of considerations. Regarding aerial logistics, applications were considered beneficial given that they contributed to a mode shift from ground transportation, leading to a reduction of CO2 emissions while enhancing the connectivity between urban areas. What is more, medical deliveries and deliveries of goods to parcel stations were positively acknowledged as such applications were perceived as useful and accessible to the public. Conversely, individuals expressed reservations about the desirability of using drones for food deliveries and urban passenger transport with VTOLs, though ultimately these were seen as political decisions (A).

Overall, strategic interest was expressed in increasing the city’s economic attractiveness while positioning it as a leading metropolitan region in this innovative field (A). This is particularly true in light of the opportunities for participation associated with Hamburg’s UIC2 membership and the current legal developments at the European and national level. In respect to the ongoing positioning and capacity building in the individual authorities, the interest in a formalized coordination structure for UAM was pointed out as common sense (A).

4.2. Challenges Regarding UAM and U-Space

However, participants also highlighted challenges for authorities in introducing UAM services to the city. On one hand, from an operational perspective, challenges emerge for Hamburg public institutions in regard to building and maintaining hardware and software pools in addition to establishing common operational standards, e.g., to adhere to data protection regulations and to ensure occupational safety and processing of data. Interferences with flying drones or the harassment of their pilots during operation were seen as a potential threat (A). On the other hand, as a managing body of urban drone use in light of limited airspace capacity and unequal desirability, the question arose how many drones the city would actually want and how to prioritize applications. Satisfactory answers were not found. A central challenge was thus seen in defining inter-authority working structures, coordination processes, in developing competence and personnel, and in financing the technical and personal resource requirements (A, C).

Ensuring social acceptability regarding UAS applications and reacting to changing political framework conditions was highlighted as a key challenge for the long-term planning of UAM initiatives by the local administrations (A). Linked to this was the recurring question of how to address public opinions and concerns in respect to UAM and U-Space and who should take on the main responsibility for coordinating these tasks at the municipal level (A, B, C).

Furthermore, department-specific tasks were discussed. For example, securing land for UAM infrastructure and implementing novel procedures to issue building permits for drone-related infrastructure were pointed out as a challenge from an urban planning perspective (A, B). For the prosecution of drone-related offences by the regulatory authority and police, more resources were deemed necessary (A, C).

4.3. Affected Public Concerns from Operations

Public concerns expected to be affected by an increased drone usage were discussed for the first time in the UAM strategy workshop, subsequently documented as part of the official enquiry with the authorities in respect to U-Space and assessed in a practical manner as part of the U-Space planning workshop. They can be summarized as follows (A, B, C):

• Maintaining public order and security, referring to risks stemming from illegal drone usage, cybersecurity threats, accidents, breaches of spatial security (e.g., of police stations, administration buildings, or critical infrastructure), and the protection of private rights (e.g., privacy of pupils and teachers);
• Protection of the area function, including the conservation of culturally, socially, and environmentally sensitive areas from visual disturbance or noise exposure, including the protection of wildlife.

Responses on the worksheets during the U-Space planning workshop underlined that the designated land use and area function over which UAS shall operate (e.g., industrial, residential, recreational, or mixed-use) as well as the projected number and nature of drone applications (overflight, location-based) within these areas were central benchmarks for the assessment of a threat to public concern.

4.4. Local Approaches for Urban Airspace Planning

The stated ambition in the procession of the worksheets during the U-Space Planning workshop was to resolve conflicts between the permissive operation of UAS in various geographical areas and the protection of public concerns. Participants were given the possibility of freely proposing and applying instruments for UAS traffic management aligned to their needs. In summary, legal and planning instruments assessed as particularly effective were those that make UAS operations subject to:

• Special coordination and approval requirements, either completely or during specific periods (e.g., the breeding season of endangered animals);
• Requirements that vary depending on the UAS’s purpose (e.g., greater operational freedom may be granted for humanitarian uses);
• Restrictions based on the type of UAS flight maneuver (overflight versus location-based), with overflight maneuvers considered less disturbing;
• Limitations based on the duration and intensity of UAS activity in the area (including the definition of thresholds).

Another aspect emerging from the discussion about larger and contiguous areas such as parks was that certain flight routes were assessed as safer and less invasive than others and that it should therefore be possible to bundle air traffic in favorable corridors, as it is common sense in mobility planning (C).

4.5. Managing Requirements in the Designation Phase

A central topic in the discussion concerning relevant tasks during the designation phase of a U-Space airspace was the participation in the identification of sensitive geographical areas within the remit of the respective authorities. In the planning workshop, these areas were predefined and limited to the worksheets, however, their substantive discussion yielded insights. First, certain regulations for drone traffic over areas covered by the German National Air Traffic Ordinance [55] were deemed by local authority representatives to require adjustments. In this specific instance, this included nationally-defined distance restrictions to a nature conservation area that were contradicted by a much larger radius in which resident birds of prey hunt and raise their young, as well as public administration buildings and a police station due to advanced espionage technology and the need for privacy protection. Second, other regulations for geographical areas covered by Section 21(h) LuftVO were considered uncritical or disproportionate in tendency. Statements from participants referred to worksheets and scenarios depicting purely industrial areas and public transport infrastructure such as waterways, rail tracks, and roads. Third, a need for the management of unregulated areas was stated, such as cemeteries, local recreation areas like allotments and green spaces, and public cultural, sports, and play areas. With regard to the indication of such areas in the U-Space designation phase, it was unclear whether local authorities would have any responsibility to additionally coordinate with local stakeholder groups such as estate owners, gardening associations, or local environmental associations (C).

4.6. Managing Requirements in the Execution Phase

Central to the discussion regarding the execution phase of a designated U-Space airspace was the creation of dynamic airspace restrictions. It was largely unclear to those present at the authority enquiry and the U-Space planning workshop which events could influence the orderly operation of U-Space and therefore had to be communicated by the local authorities to the CISP as a central data interface (B). Concrete examples from the discussions on the worksheets were urban construction projects, public assemblies and major events, missions by emergency services, but possibly also ecological events such as the breeding of protected bird species (C). It was unclear how these processes should be implemented and streamlined within the different administrations and how the communication interface with the CISP will be designed (C).

Furthermore, control tasks were anticipated to ensure the orderly operation of UAS by their pilots. This was discussed in conjunction with extended police tasks for danger prevention, detection, and law-enforcement. Due to Hamburg’s special status as a city-state with its own aviation authority, supervisory tasks of USSPs operating in the corresponding U-Space airspace were also discussed in this context (B).

Next, monitoring and evaluation tasks were anticipated with regard to the impact of U-Space on the environmental impact, economic return, and societal responses related to drone usage in general, as well as specifically on the above-mentioned cross-sectoral goals. Apart from this being deemed necessary, the discussion did not go so far as to define local-specific key performance indicators of U-Space that would reflect the city’s current development priorities (B, C).

Last, stakeholder communication and public relations were emphasized as a municipal task (A, B, C). For example, the establishment of a central information and complaints management system for the population was proposed during the U-Space planning workshop. It was suggested further that relevant key figures of the local U-Space should be publicly available. In detail, it was debated whether flight information could be made public while respecting trade secrets, in order to create transparency about the use of UAS in the urban area. Both systems were examined not only in respect to public acceptance but also considered beneficial to avoid overloading local regulatory agencies with false reports by concerned citizens (C).

4.7. Summary of Results

In summary, the results underline the strategic interest of introducing U-Space to boost the city’s economic appeal and enhance the provision of public services. Applications seen as beneficial to the broader community were viewed more favorably. However, it remains unclear how the city can prioritize different UAM services. In the tested designation of a local U-Space airspace, a need to balance competing interests emerged between permissive urban air traffic and safeguarding the subjacent area functions, public order, and planning legitimacy vis-à-vis civil society and citizens. In absence of a national legal framework and with the applicability of existing urban planning instruments questionable, the trailing of municipal legal and planning instruments showed the capacity to resolve these conflicts. Regarding the management of a U-Space airspace after its designation, participants expressed the need to clarify roles, e.g., for managing dynamic airspace restrictions, stakeholder communication, and to enforce drone regulations locally.

5. Discussion

The following chapter seeks to discuss these findings with regard to the research questions, contextualizing key considerations of urban drone integration regarding the multi-level governance of U-Space.

5.1. Local Economic Growth and Cost-Benefit Distribution

From an administrative perspective, the Hamburg case study outlines significant economic motivations surrounding U-Space. The underlying assumption is that a functioning U-Space service market is projected to accelerate flight approvals and facilitate local BVLOS operations, enabling drone operators in sensory and delivery applications to offer timely services on a larger scale, all leading to business growth and enhanced urban investment attractiveness [29]. However, realizing this economic added value remains hypothetical in the absence of established U-Spaces in Europe at the time of this study. In line with that, experience from the City of Helsinki regarding sensory applications confirms that in-depth analysis of each UAS service, their providers, and their customer segments are needed [8]—including an understanding of where the often much larger value creation from down-stream drone-data exploitation occurs. Such an understanding must form the basis for the targeted promotion and public-welfare oriented exploitation of local UAM and U-Space service markets. For most cities, however, the development of such local value creation frameworks may be challenging due to limited capacities [57]. At the same time, the potential of non-local private actors to exploit lower airspace resources for sensory as well as transportation applications without contributing to local economic development must be critically acknowledged. That is, given the cross-border nature of BVLOS operations and USSPs operating across a European internal market.

Consequently, the risk of an unfair sharing of public costs through aerial traffic for private benefits exists. Initial considerations on UAM [34,58] point towards constellations where non-local private actors capture economic value and enhanced efficiency, while local authorities are implicitly mandated to manage the resulting administrative and societal costs of UAM, e.g., planning adoptions, security monitoring, and public outreach. In light of the multi-level governance of U-Space, this fiscal asymmetry may be described as the functional equivalent of an ‘Unfunded Mandate’ where the devolution of governance responsibilities occurs without the financial mechanisms necessary to cover implementation and external management costs [59]. Instituting such fiscal mechanisms is thus relevant, as fiscal failure threatens the local political buy-in and sustainability of UAM and U-Space.

5.2. Public Service Provision and Capacity Building

The necessary resource costs are also a key consideration in relation to the stated interest in the Hamburg case study of establishing a dedicated drone unit servicing on behalf of upstream authorities. Capitalizing on the operational benefits of U-Space for public services refers, in particular, to enabling efficient BVLOS operations over densely populated areas for tasks like infrastructure inspection. Likewise, such units could play a crucial role in articulating local-level application interests within the U-Space multi-level governance process. Initially, however, successfully integrating drones into public service operations requires both technical competencies (including pilot training, regulatory compliance management, sensor deployment, and data analysis) and enabling structures (including data governance frameworks, software-supported data processing, and the transformation of this information into target-oriented actions [60]). Furthermore, internal capacities are needed for employees to engage with regulatory requirements during the designation process to effectively leverage U-Space locally. Consequently, for the local level to capitalize on these operational benefits and effectively articulate its interests in the airspace designation process, substantial investment and capacity building efforts are necessary. Given the broad application potential of UAS for smart governance and efficient public service provision [61,62], the provision of higher-level funding to co-finance this resource allocation seems target-oriented. Such dedicated funding may serve as a vital incentive for municipalities, mitigating the capacity gap between administrative tiers and ensuring local actors can actively engage with regulatory requirements.

5.3. National Law and Local Steering Competencies

From a legal perspective, the observations from the Hamburg case study point to limited options for action by local communities within the current governance framework for drones. In Germany, this means that national ordinances (LuftVO) conclusively regulate the operation of UAS over certain geographical areas, such as U-Space airspaces. However, when participants of the Hamburg case study were asked to identify sensitive areas for a U-Space they found that national regulations needed to be more flexible for the local specific context. For example, the protected zone around a nature reserve was considered too small for local bird-of-prey activity, and legislation on UAS operation over public waterways have been considered too restrictive in the harbor city. Participants also identified a need to manage UAS traffic over unregulated geographical areas, such as various recreational areas and cemeteries to protect their area functions. This need for context-specific adoptions highlights a core tension in respect to multi-level governance between higher tiers to seek efficiency through uniform standards while local actors require steering autonomy to apply the principle of subsidiarity, to address local externalities, and to secure public legitimacy [11].

Regarding U-Space, these results point to imminent policy decisions at the national level as to whether—and to what extent—steering instruments should be available in UAM and U-Space planning for local-level stakeholders [63,64], or whether these will remain in higher administrative levels [55]. On one hand, the status quo significantly limits the local level’s influence over airspace usage, potentially hindering the alignment of U-Space with public expectations and local sustainable urban development goals [65]. It might, however, hinder excessive local airspace restrictions that would erode the economically efficient utilization of UAS [66,67,68,69]. An active role on the other hand, as advocated for by various cities and regions in the Manifesto on the Multilevel Governance of the Urban Sky [70], may empower local authorities to proactively integrate private interests and public concerns in U-Space planning. However, this necessitates increased inter-authority coordination, resource allocation, and the active application of legal and planning instruments. In urban planning practice in particular, this catalyzes a shift towards three-dimensional planning and digital urban twinning to visualize concerns, define dynamic airspace restrictions and propose alterations to flight corridors [71].

When weighing up these aspects with regard to a functioning U-Space multi-level governance framework, the findings from the planning workshop may provide important impetus. This has shown that potential conflicts between efficient airspace utilization and airspace restrictions for protecting public concerns on the local level might be effectively addressed through nuanced local level steering competencies. Municipal actors highlighted the value of instruments that allow for context-specific regulations, such as differentiating restrictions based on the purpose of drone operations, types of maneuvers, intensity of airspace penetration, and the possibility of bundling UAS traffic in designated corridors.

5.4. Urban Planning and Market Based Instruments

Considering the uncertainty in the national implementation process of the European U-Space CIR, participants of the Hamburg case study raised questions regarding the effectiveness and applicability of already existing urban planning instruments to the local aviation context. Drawing on suggestions from prior research, such instruments may include defining building regulations for UAM take-off and landing sites [72] and exploring market-based instruments like certificates or variable pricing schemes to incentivize or discourage specific drone applications [73]. Similarly, the contractual relationship between municipalities and future USSPs should be considered with foresight. With formal obligations in place, additional operating principles, data sharing policies, and accountability arrangements may be implemented to balance private and public interests [74]. Last, the balancing of private and public interests in already designated U-Space airspaces may require anticipation. Given the resistance to change in infrastructure systems due to established regulations and special interest groups [75,76], a hindrance to long-term urban development caused by U-Space may be possible, e.g., if private sector business models of USSPs or UAS operators are negatively affected by local administrative decisions, such as the designation of new nature conservation areas. Integrating U-Space considerations early into urban master planning may avoid such events and strengthen the local level’s role in the multi-level governance process [71,77].

5.5. Stakeholder Participation for U-Space Planning

Participants in the Hamburg case study expressed significant uncertainty regarding stakeholder expectations and concerns about increased drone usage in urban airspace, encompassing the perspectives of political bodies, citizens, businesses, and civil society organizations. This underscores the importance of participatory measures to inform policymakers and integrate public perspectives into local U-Space governance. While likely delaying the U-Space airspace designation, corresponding research suggests that investing early in participatory planning on drone-related issues must be weighed against the long-term benefit of public engagement as a pathway to foster a more resilient and sustainable trajectory. This is achieved by preventing societal conflicts and policy blockades arising from the inadequate representation of concerns and interests [78,79,80,81]. As a recent technology assessment study on drones for transportation suggests, such processes should center around the guiding question “how the use of airspace […] can support the development of sustainable city communities for the common good” [7]. Besides inclusive stakeholder mapping [82] and adequate resources, this requires a clear understanding of local decision-making authority in the multi-level governance of U-Space [83], as a precondition for “binding statements and actual measures” by the municipality [7].

5.6. Public Engagement Formats

By now, various participation formats have been employed to explore novel UAS and UAM services, their desirability, and how these services must be designed to ensure public acceptability. These include focus groups [84,85], public consultations [86], and Living Labs [87]. Furthermore, interest-specific dialogue formats, such as the use of drones in biodiversity conservation [88] or regarding drone use in policing [89], show sustained outcomes. To inform decision makers and integrate the perspectives of citizens into U-Space planning and administration, participatory mission statement processes may be considered in the future, as they are already part of contemporary urban planning practice [90]. In the context of representative democratic decision-making, cost-transparent mini-public participation formats with randomly selected citizens may also be viable to create an informed basis for policy and practice on U-Space [91,92]. Referring to experiences in bottom-up use-case planning for a rural drone delivery network, workshops with residents have proven effective in determining, e.g., flight corridors, no-fly zones, and landing infrastructure [93]. Transferring such experiences to the multi-level governance of U-Space, citizen participation formats should be promoted at early stages of the designation process with the aim of improving planning quality and legitimacy through an adequate representation of concerns and interests of citizens.

5.7. Transparency and Responsiveness in U-Space Management

In reference to the execution phase of U-Space, outreach was considered crucial to form informed opinions on U-Space and UAM operations. Previous efforts included information portals, public debates, and demonstration events [94]. Additionally, a central information and complaint management system was proposed during the Hamburg case study, to be established by local authorities. Through this system, concerned citizens could report suspected non-compliant drone operators, thereby providing adequate responsiveness. Furthermore, open real-time flight radars have been considered in the case study to increase transparency regarding airspace use, potentially relieving local law enforcement agencies as well by reducing the number of false reports. With regard to the multi-level governance of U-Space, both proposals may be understood as important instruments of the accountability mechanism, increasing public trust and the acceptability of U-Spaces. However, as developing these tools at local level represents an inefficient use of resources, such functions should be made available to local authorities, e.g. as part of the ongoing improvement of UTMS capacities.

6. Conclusions: Towards City-Centric U-Space Planning

Participation in the designation procedure of U-Space airspaces might be required for regional and municipal administrations, as specified by Article 18(f) of the Commission Implementing Regulation (EU) 2021/664. Based on a case study involving the administration of the Free and Hanseatic City of Hamburg, this article draws attention to relevant public concerns regarding urban drone traffic, strategic interests in U-Space, and administrative requirements for its designation and management within the multi-level governance framework.

Summarizing the three-stage process, the results underline the strategic interest in U-Space to enable UAM applications to boost the city’s economic appeal. Applications seen as beneficial to the broader community, such as medical logistics and drones in public service, were viewed more favorably. However, it is unclear how the city can prioritize different applications. In the trailed designation of a local U-Space airspace, a need to balance competing interest emerged between permissive urban air traffic and safeguarding the subjacent area functions. Since, at the time of the study, a national legal framework was not yet in place, the planning workshop demonstrated that the availability of municipal legal and planning instruments based on factors like flight purpose, maneuver type, and traffic density, among others, have the capacity to resolve these conflicts. Regarding the management of U-Space after its designation, participants expressed the need to clarify roles, to set up a formal coordination structure and to increase workforce for managing dynamic airspace restrictions, stakeholder communication and to enforce drone regulations locally.

The article contextualizes these key considerations of urban drone integration regarding the multi-level governance of U-Space, highlighting the risks of fiscal asymmetry and the critical need for local capacity and legitimacy. Policy and planning recommendations include:

• Establishing mechanisms that counter the functional equivalent of an ‘Unfunded Mandate’. This includes defining local value creation frameworks to secure economic returns from U-Space and pathways to mitigate the risk of data extractivism and the unfair sharing of public costs and private benefits. Furthermore, providing higher-level funding to co-finance local administrative capacity (e.g., dedicated drone units) may serve as an incentive to ensure the municipality’s buy-in.
• Strengthening the role of regional and local authorities in the multi-level governance for U-Space, specifically by developing competence in three-dimensional spatial planning and by providing legal and planning tools that allow for context-specific regulations to align the benefits of UAM and U-Space with public interests and local development goals.
• Conducting legal reviews of existing urban planning instruments (e.g., defining building regulations for take-off/landing sites) and market-based instruments (e.g., variable pricing schemes) for their applicability. This also necessitates critically assessing the contractual relationship between municipalities and USSPs.
• Investing early in stakeholder participation formats, aiming for the identification and adequate representation of concerns and interests to prevent societal and political conflicts, thereby improving the planning quality of U-Space.
• Guaranteeing transparency and adequate responsiveness to citizens’ concerns through centralized accountability tools provided to the local level as part of ongoing UTMS capacity improvements. This includes establishing a public information system with drone flight radars and a central complaint management system.

Although these recommendations accurately reflect the results of the Hamburg case-study, they are qualitative in nature, and their generalization is conditional. A comparison of outcomes may be advisable once a stable national legal framework is in place. Implementing the study in different areas, such as industrial estates or logistics hubs, would likely identify different stakeholder interests and concerns. Last, a replication must also consider the varying levels of governance structures, responsibilities, and—compared to the UIC2 model region of Hamburg—potentially lower levels of prior knowledge. Nevertheless, the methodology successfully facilitated inter-agency capacity building and coordination for UAM and U-Space. It can therefore serve as an adaptable template to increase legal and planning readiness for the introduction of U-Space at the regional and municipal level elsewhere.

Finally, this study underscores the legal and administrative complexities inherent in the multi-level governance for U-Space. Overall, this research argues for adopting a city-centric planning perspective. By operationalizing an active role in the designation and management of local airspaces, municipalities can move beyond U-Space as a mere enabler for drone traffic, leveraging it instead as a novel tool to advance integrated and sustainable urban development goals in line with public expectations.