2023-PaperAbstracts | City Debates

City Debates 2023 Abstracts

Richard Dunning, Liverpool University
Paper Title: Climate Value and Land Capture

Abstract
Climate change is producing a sea change in values. This change is compounded by both a reassessment of the nature of value and the differentiated spatial impact of climate change on communities’ existence. Policymakers from the national to the local community are re-evaluating the concept of value considering existential challenges from changes to the climate and climatic-related hazards. The normative rationale to limit environmental degradation is gaining traction in some political spheres and yet in others remains weak. From the global to the local scale, climate change is heterogeneously experienced; some communities are already experiencing existential threats, whilst others are benefitting from improved crop-growing conditions.
This paper considers the relationship between changing views of value and the locational impacts of climate change on land values. It reconsiders the potential for land value capture as a public policy financial instrument to direct private sector development outcomes and public infrastructure to enhance community resilience in light of climate change.
Land Value Capture (the state recouping some of the increase in private land values from its own action) plays a significant role in meeting public policy goals. Deciding which public policy goals, it should support seems to often take on a historic path dependency. Does Land Value Capture meet contemporary challenges and may it also be contributing towards climate change and societal unpreparedness? Drawing on global conceptual debates, this paper refers to the current challenges in operating Land Value Capture in England to consider its potential to support climate change adaptation.

Tom Goodfellow, University of Sheffield
Paper Title: Land value challenges in urban Africa: creation, distortion, and capture

Abstract
There can be no doubt that rising land values, combined with frenetic property development, are playing a substantial role in fueling economic growth in many African countries. The benefits of this growth are, however, rarely distributed widely. Speculative urban land markets – in which buying land often serves as a substitute for depositing money in a bank – have the effect of both limiting productive investment into the real economy and, if land value capture mechanisms are not in place, depriving city governments of resources for public services and infrastructure. There is therefore a double imperative to develop effective mechanisms of value capture, in order to bolster public resources while also shifting investment incentives in ways that free up capital and potentially stimulate more productive activity and job creation.
While there are some common factors relating to drivers of land value increase and challenges in tax collection capacity, there is also huge diversity across Africa in terms of the types of ‘urban propertyscapes’ emerging, the types of infrastructure prioritized and the nature of urban land tenure. The distinctiveness of land and property development trajectories poses challenges for the application of standard modes of land value capture. Drawing on material from Ethiopia, Nigeria, Rwanda, Tanzania and Uganda, this presentation explores how urban land value is created – through more obvious stimuli such as major road investments and other forms of connectivity as well as through security, exclusivity and ‘hype’. But it also considers the ways in which land can – in a market sense – be ‘distorted’ through such activities as money laundering, speculation, insider knowledge about planned infrastructure projects, incomplete or falsified land records, inconsistent compensation for compulsorily acquired land, and the use of multiple unregulated platforms for land trading. These features of urban land markets generate major challenges for effective and equitable land value capture which – though formidable – must be overcome in the pursuit of just and sustainable urban futures.

Sonia Guelton, Parisian School of Urban Planning and Studies
Paper title: Land value capture, a good idea, more hazardous path

Abstract
Land value capture is a common way to finance infrastructure in a development project in France. It is not that common to finance large transportation project like the one in Paris: the “Great Express Train”. The objective of the presentation is to compare the LVC options proposed by stakeholders before the beginning of the project, and the LVC tools being implemented. It will stress the main objectives and the pressure from contextual situations.
First part of the presentation will present the different option discussed by different stakeholders at the beginning of the project: The State who has initiated the project, the public agency which is building the train, local authorities which are involved in the development around the train stations, and developers. It will underline an attempt to fix common principles concerning the use of LVC tools. Second part of the presentation will present and discuss the operational choices. It will point out the influence of the context with increasing land prices around the stations and a pressure from the developers to build. Finally, stakeholders will implement specific LVC tool in order to meet its own objectives.

Astrid Haas, Independent Urban Economist
Paper Title: Recouping the Value: Land Value Capture and Urban Planning in Jordan

Abstract
As cities grow, local governments have to make major investments in institutions and infrastructure. Larger cities inherently require more effective provision of public services – such as roads, water, sewerage, and safety – so they can become places of rising living standards and productive industries, as opposed to sites of crowding, congestion and contagious disease. As urban populations grow and investments are made in cities, demand for urban space is capitalised into rising land and property values.
Policy tools such as contributions and fees are important instruments through which local jurisdictions can tap into these rising values. In Jordan, the revenue from land-value capture instruments already constitutes the majority of the city of Amman’s own-source revenue. In 2018, these taxes, which include both land and property taxes, accounted for roughly 60% of the total USD700 million budgets. However, the pace of urbanisation in recent years has challenged the municipality’s ability to meet infrastructure needs with its current tax-take. Over the last 15 years, Amman’s population has more than doubled from around 1.94 million in 2004 to an estimated 4.2 million today. At the same time, total urban land cover is estimated to have increased by more than 60%. If Amman continues to grow following its current patterns, its predicted that by 2030, land consumption could increase by 41.44km2 and that this growth could cost the municipality roughly JOD232 million in infrastructure and JOD253 million in services.
As Greater Amman Municipality (GAM) is now looking to amend at least one of the laws that embed the land value capture instruments, namely the Planning Law. Therefore, this analysis aims to outline some of current challenges and potential opportunities that can be considered in the law’s reform. The focus is on the implementation of four different taxes and charges that GAM currently has in place, namely:
• General Development Levies
• Special Development Levies
• Betterment Levies
• Compensation Fees

Claudia Hitzeroth, Development Action Group (DAG)
Paper Title: The Role of Land Value Capture in Financing Inclusive Cities: Civil society experiences of institutionalizing LVC in South Africa

Abstract
South Africa cities are confronted with the compounding challenges of urban growth, inadequate basic service provision, deepening poverty and spatial inequality. Traditional forms of public finance have been significantly limited in their ability to address these challenges, which has driven a long interest in Land Value Capture (LVC) as a tool for revenue generation. However, in more recent years there has been a push to move beyond just revenue generation as an imperative for value capture, and instead focus on the innovative application of LVC towards the realisation of a more equitable, inclusive, and spatially sustainable city.
The presentation focuses on the role that civil society intermediaries have played in fostering the institutionalisation of such innovative LVC instruments to achieve the goals of a more equitable, inclusive, and spatially sustainable cities. The presentation focuses on the Development Action Group’s experience in convening platforms to support the development of an LVC based inclusionary policy in Cape Town. The presentation also highlights the key opportunities and challenges emerging from the process, as well as important lessons and positive spinoffs emerging from the process. One such positive spinoff was the establishment of the National Land Value Capture Programme, a tripartite partnership between the Development Action Group (DAG), the Lincoln Institute of Land Policy and the National Treasury’s Cities Support Programme (CSP). The programme aims to strengthen the capability of metropolitan governments to implement innovative Land Value Capture tools and strategies.

Nikos Karadimitriou, UCL
Paper Title: Public Value Capture, Climate Change and the Infrastructure Gap in the Context of Development Rights Allocation Processes in Greece

Abstract
The presentation examines the role that Public Value Capture (PVC) mechanisms could play in providing a source of funding for urban infrastructure in coastal areas in Greece. High development pressures in those areas have been exacerbated in recent times by the growing ‘informality of desire’. Therefore, in a context of climate change, the case study areas face the dual challenge of an increasing ‘investment gap’ and increasing vulnerability. Although the estimated costs are still based on approximate calculations, they are substantial.
Using primary and secondary data, as well as analysis of the legal and policy frameworks, the paper shows that ‘informality of desire’ is not only tolerated but actually incentivized. In fact, a more detailed look at the way development rights are allocated in Greece shows that such practices are well-established historically and constitute a key ‘technology of governance’.
The results of this ‘way of doing things’ are substantial short-term financial benefits for private developers and property owners but also some gains for local authorities and central governments. However, the value captured via the legalization fees and property taxation is not adequately ringfenced and, in any case, it is not enough to cover the infrastructure gap and the potential compensations in case of natural disasters. Although the presentation will not cover other countries’ examples, it will offer a brief view of the situation in France, Italy and Portugal to show that the circumstances in Greece could offer policy insights that might be relevant to other coastal areas in Europe.

Deena Khalil, American University of Cairo
Paper Title: Using Land Value Capture and Local Area Development Planning to Foster Adequate Housing

Abstract
Government driven attempts to provide adequate housing to residents of informal areas in Egypt have achieved positive but minimal results when compared to the growing population of such areas. This has often been attributed to the shortage of public funds. However, many of such informal areas boast a vibrant real estate market that may hold the potential to bear the costs of upgrading and regenerating these areas. This presentation will discuss the potentials of harnessing the existing housing stock and the real estate market as a way to facilitate urban upgrading and increase affordable and adequate housing, drawing on the experience of the Local Area Development Plans that were prepared and implemented in parts of Cairo and Giza.

Mona Khechen, American University of Beirut
Paper Title: Developer Obligations, Funder Requirements, and Safeguard Challenges in Lebanon

Abstract
Developer obligations, or exactions, are financial and/or in-kind contributions that governments seek from land developers to compel them to bear the costs of mitigating the negative impacts of their projects, and/or impose on landowners to extract public benefits from them in exchange for regulatory decisions or infrastructure improvements that increase the value of their land. In Lebanon, such obligations are quite limited and not considered a main instrument of financing public infrastructure and urban development programs. Considering Lebanon budgetary deficits, the implementation of major public works is mainly financed through (concessional) loans and grants.
Naturally, lending International Finance Institutions support financially viable projects that meet certain environmental and social safeguards. They require that borrowers assess the impacts of their proposed projects and mitigate adverse effects. Being more stringent, these requirements could potentially offer a benchmark for national safeguards and help responsible government institutions ensure that investments in urban infrastructure and development projects do not bring undue social or environment harms. In practice, however, the implementation of safeguards could be challenging due various reasons chief among which are issues related to land use and valuation.
This presentation will shed light on these complexities with reference to two contexts in Lebanon where land-related impediments eventually led to the cancellation of proposed projects: Khan al-Tamathili in El-Mina (part of AFD/EIB Urban Projects Finance Initiative), and Al-Jamal waterfront site in Sour (part of the World Bank/ AFD Cultural Heritage and Urban Development project. Through these examples it aims to underscore land different values and to outline some of the key challenges that need to be addressed in designing appropriate land value capture instruments to the Lebanese context.

Mohamad Nada, The World Bank
Paper Title: Introducing LVC Tools in Egypt and the MENA Region, Recent Experiences

Abstract
Land Value Capture (LVC) instruments are tools used by governments to recover a portion or all of the land value windfalls linked to public action or interventions. These instruments can be classified in accordance with either their nature to include taxes, fees, and regulatory instruments or if the value to be captured is linked directly or indirectly to specific government decisions or actions. Several LVC instruments are well rooted in the legal framework of several countries in the MENA region, however their application is facing several challenges that include the outdated or vague regulatory framework, limitation in the administration of these instruments, challenges in the valuation of the increment of the property’s value, and the political economy challenges hindering LVC instruments application. This presentation will aim at exploring the key LVC instruments applied in Egypt and several countries in the MENA region, as well as identifying the key constraints and opportunities regarding their application in the region. Specific case studies will be presented, and a number of lessons learned will be highlighted.

Enrique Silva, The Lincoln Institute of Land Policy
Paper Title: Finding Answers in Land: Land Policy for Sustainable and Equitable Cities

Abstract
The pursuit of sustainable and equitable cities requires a serious, systematic embrace of land as the subject of public policy and a source of public revenue. Land’s paradoxical status as a collective and private good is what underpins the need for governments to develop and apply an array of land policies and planning systems. Yet, land is often underestimated, if not fully ignored, in debates and policy approaches to address today’s most pressing social and environmental challenges many of which are urban. Policy makers, academics and planners are asked to see the ways land can provide key answers to many of the problems they face in cities, namely housing crises and a growing demand for infrastructure and services. As important, we will discuss why and how land is a legitimate source of revenue for local governments, but why it is often untapped as such. Land based financing as a concept and set of fiscal tools will be defined and illustrated to demonstrate how cities in both the Global North and South are developing and deploying land policies and planning regimes that integrate land use with social aims, as well as mechanisms to finance small and large scale urban projects. The political and technical challenges facing land based financing approaches to advance sustainable and equitable cities will be outlined and used to challenge practitioners and policy makers to discuss the boundaries of equally important concepts such as private property rights and the social function of property. Underpinning the entire topic are the questions: how do we value land and who owns the value of land?

Francisco Sabatini, Universidad del Bío & Catholic University of Chile
Paper Title: The housing global crisis experienced from Chile: political and academic challenges

Abstract
Today insufficient and expensive housing represent a global problem, especially acute in cities; a problem that affects a growing number of low- and middle-income households. Urban home ownership has become a major financial asset in nowadays capitalism. In the cities of Chile and Latin America the housing crisis has been aggravated by the breakdown of the traditional pattern of segregation, which has meant the spatial dispersion of wealthy people from their former privileged neighborhoods. Virtually any piece of land has a “more efficient use” than low-priced or “social” housing. Neoliberal housing policies, consisting basically of a demand subsidy or voucher, produced many units over a long period (four decades in Chile) but, at the same time, favored the appearance and deepening of urban ghettos. With capitalism turning into an “asset economy,” the housing shortage is getting worse. The strategy of real estate capital since the 2008 crisis of seizing enormous extensions of the housing stock to promote the rental housing sector clashes with the search of people for their “own house”, a traditional goal of Latin Americans and growing in rich countries. It makes it possible to counteract economic instability and improve the lot of future generations. The new global crusade of real estate capital against “home ownership” becomes a key and critical social struggle. The fabrication and collecting of “rent gaps” are in the eye of the hurricane and are becoming perhaps the main challenge for housing policies. The “neoliberal right”, the most powerful social and political ensemble of these decades, faces internal contradictions between its traditional conservative culture and its adoption of neoliberal doctrine. The debate over land price inflation confronts the traditional right-wing view of masquerading them as production costs with the strict neoliberal understanding of unearned rents that may well be taxed. What is to be done? Inclusionary housing is a mandate and, at least in Latin American cities, a possibility, in part because of cultural traits –and value capture, a tour de force of public policy.

Mariona Segú, CY Cergy Paris Université
Paper Title: The impact of taxing vacancy on housing markets: Evidence from France

Abstract
Vacancy is a common phenomenon across developed countries. Policymakers seek to reduce vacancy as it is seen as a challenge to housing affordability, especially in large cities. Taxing vacant housing is becoming a more popular tool among lawmakers, and yet this instrument has never been properly evaluated. This paper provides the first evaluation of a tax on vacant housing. First, I develop a model to understand the mechanisms of vacancy creation. Then, I use the quasi-experimental setting of the introduction of a tax on vacancy in France in 1999 to identify the causal direct effect of the tax on the vacancy rate. Exploiting an exhaustive administrative dataset, which contains information on every housing unit in France from 1995 to 2013, I implement a difference-in-difference approach combined with a propensity score matching strategy. Results suggest that the tax accounted for a 13% decrease in vacancy rates between 1997 and 2001. The impact is especially concentrated in long-term vacancy. Results also suggest that most of the vacant units were turned into primary residences.

Şevkiye Şence TÜRK, Istanbul Technical University (ITU)
Paper Title: Questioning Public Value Capture in Inner City Renewal, Current Practices in Istanbul

Abstract
The concept of Public Value Capture (PVC) is based on the assumption that land values that rise without the efforts of the landowners do not belong to the landowners, and that much or all of such rising values should therefore be used for the public good. Public investment and expenditure are made to increase the prosperity of all citizens and to redress imbalances in the distribution of wealth. Every citizen should have a share in the public revenues. As the most significant factor in urban property value increases is the planning and infrastructure expenditure of local and central governments, the importance of capturing the property value increases resulting from such public investment and using them for the public good has been recognised by central and local governments. In most countries, urban policies and planning focus on urban renewal rather than new development. Urban renewal involves the demolition and reconstruction of run-down, derelict or, in some cases, underused urban areas. In such interventions, decisions are made on how to best use the renewal land in contrast with earlier land use decisions. As a result of these expanded development rights and new infrastructure investment decisions, property values in the urban renewal area increase. This increase is not the result of the efforts of the landowners, but of the actions of the public, which in turn justifies the redistribution of the increased value in such areas to the public. However, it is not easy to capture such values. Because incentives are frequently used in urban renewal areas to attract investors, a high-value capture amount in urban renewal areas may actually be considered an obstacle to investment. When all these factors are taken into account, some critical questions about value capture in the renewal of inner city areas emerge: how can the capacity to capture value be determined, what are the roles and powers of the actors, how is the distribution of value among the actors? This presentation aims to explore these issues. This presentation aims to explore these issues by focusing on current practices related to the renewal of inner city areas in Istanbul. Over the past 20 years, Turkey has been engaged in significant urban renewal practices. Istanbul in particular is the most dynamic area in terms of such practices. A significant rise in real estate (or land) values occurs in urban renewal areas, which gives rise to a high rent gap. One of the most important reasons for this gap is the fact that urban renewal areas are mostly made up of informal settlement areas that are located close to the city centre. This is because property values in these areas are quite low, but urban renewal projects in these areas tend to produce housing units for higher income groups. As in many countries, value capture in urban renewal has not yet been adequately institutionalized in Turkey. As the development of efficient and active value capture policies in urban renewal areas is important for many countries, Turkey’s experience may provide important lessons.

Helen Rourke, Development Action Group (DAG)
Paper Title: The Role of Land Value Capture in Financing Inclusive Cities: Civil society experiences of institutionalizing LVC in South Africa

Rachel Weber, University of Illinois at Chicago
Paper Title: No future? Banking on future land values during uncertain times

Abstract
Value capture financing for public infrastructure depends on the ability to forecast the future. But what happens to the future and future land values during a public health or currency crisis?
My talk will examine the importance of expectancy in real estate speculation and valuation and how the models used to forecast the future also help to construct those futures. Based on several years of ethnographic fieldwork and forensic accounting among global property firms, small-scale land flippers, and local planning agencies in Chicago, my research traces the connections between predictive knowledge practices like forecasting and the value capture schemes that underwrite the public provision of infrastructure in entrepreneurial regimes. I investigate the performativity of future imaginaries and how they affect the decisions of real estate investors and local governments in the present.
Specifically, I show how discontinuities like the Covid-19 pandemic did not break the forecasting models and disrupt their inherently optimistic notions of growth, but instead how certain future imaginaries became even more compelling guides for conjuring the possibility of profit in the face of the uncertain. I will present the case of Lincoln Yards, a mixed-use megaproject being constructed on formerly industrial land along the Chicago River. The Lincoln Yards project illustrates how hypothetical estimates of property value growth were converted into infrastructure spending and private subsidies in the present – that, in a kind of self-fulfilling prophesy, increased transactions in the area and raised land values. In the self-referential world of real estate speculation, where actors derive more value from the anticipation of future appreciation than current cash flows, altered expectations can quickly materialize into accelerated transactions, higher pricing structures, and record profits. The crisis allowed forecasters and planners to summon an imminently more positive future, drawing the interface between present and future closer.