Land Value Capture: Guidance for Practitioners
Olga Kaganova, Jon Kher Kaw, Gabor Peteri
The purpose of this paper is to provide decision makers and practitioners working on issues of infrastructure and service finance with standardized information and data that can assist them in selecting and implementing land value capture (LVC) instruments that could be both relevant and beneficial to their cities and countries. The paper analyses all 16 LVC instruments discussed in the literature and used internationally. All the LVC instruments studied in this paper are then classified into three groups, according to their three sources of government authority: (a) government ownership of land; (b) the power to regulate land uses / land–use parameters on both private and public land; and (c) the power to impose taxes and fees (fiscal instruments) on private land/property. The instruments are analysed within a unified framework that is comprised of multiple characteristics (e.g., potential public benefit, breadth of the payers’ base, scope of global usage, critical pre-requisites, and implementation requirements, etc.). The framework also includes arguments for and against each instrument. This framework seeks to present a balanced picture of each instrument, and one that is unbiased towards any particular vehicle. The paper also discusses a number of broader issues, including the position of LVC instruments among other municipal own-source revenues and within municipal financial and asset management generally, policies that local governments can pursue to enhance land value prior to enacting LVC instruments, and typical lack of good governance for many of these instruments. The paper then concludes with a discussion of the primary challenges associated with LVCs and suggests possible ways forward.
Event: World Bank Land Conference 2024 - Washington
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