1 research outputs found
Land Value Capture and Tax Increment Financing: Overview and Considerations for Sustainable Urban Investment
The paper reviews the notion of Land Value Capture (LVC), its advantages and disadvantages and relevance
to for urban growth management. LVC encompasses a wide range of mechanisms, applied in very diverse
contexts to monetize ‘windfall’ gains, accruing to landowners because of growth, infrastructure or placemaking projects. Despite widespread conviction that a proportion of these ‘unearned increments’ should
somehow be harvested for the wider public good, contention, legal and pragmatic challenges remain. As
policy makers confront population pressures, transport needs and inequality, LVC can help bridge
infrastructure funding gaps, accelerate housing provision and temper polarisation. Betterment taxes, Tax
Increment Finance (TIF) or participatory instruments like land readjustment can target ‘planning gains’
capitalized into land and property values near stations, historic monuments or upgraded precincts. As well
as flagging instrument diversity and variable contexts, the literature suggests LVC mechanisms work best in
a joined-up policy context. Ironically, spatial LVC schemes like TIF are most likely to fail when the
regeneration need is most acute. In America, inadequate governance, scrutiny or auditing undermined
schemes to fund transport or improve the public realm. In Europe LVC exists in a variety of modalities but
three European examples, suggests it remains underutilized. London megaprojects, UK regional housing
schemes and French sprawl, illustrate that policy makers have yet to adequately capture unearned
increment