CAMBRIDGE, Mass., September 15, 2022 /PRNewswire/ — As cities and towns seek funding for transportation, parks, affordable housing and other public goods, they often overlook one of their most valuable assets: land. A new report on policy direction from the Lincoln Institute of Land Policy shows how local governments are making land more valuable by building infrastructure and facilitating urban development, and how they can ensure the community reaps the benefits .
Land value capture allows communities to recoup and reinvest increased land value resulting from actions such as building new stations or changing regulations to allow for denser development. In Capturing Land Value in the United States: Financing Infrastructure and Local Government Servicesauthor Gerald Korngold explains how key land value capture tools work and recommends a path forward for executives who want to implement them.
A professor of fiduciary law at New York School of Law, Korngold also lays out legal precedents for different types of land value capture and recommends ways for policymakers to minimize legal risk.
“Land value capture has been used in various forms and legally upheld in the United States for approximately 150 years,” he writes. “This remains a valid and viable option for funding government activities, provided that policy makers leverage the available tools appropriately.”
Korngold provides an in-depth analysis of seven land value capture tools: Exactions, Impact Fees, Linkage Fees, Special Assessments, Mandatory Inclusive Housing, Incentive Zoning and Transferable Development Rights. It uses case studies from across the country to explain how capturing land value can contribute to public policy goals such as equity and sustainability.
For example, in the northern Virginia suburbs of Washington, D.C., commercial landlords have agreed to tax themselves more than $700 million to finance a 23-mile extension of the Metrorail system to Dulles International Airport, about one eighth of the total cost of the project. . The first section of the new line opened in 2014, with the rest expected to open later this year.
In downtown Chicago, the city allows developers to build taller buildings in exchange for a voluntary fee, which is calculated based on the size of each project. The city directs 80% of revenue toward commercial development in underserved neighborhoods, 10% toward public improvements near each downtown project, and 10% toward landmark restoration.
Such policies are possible because transportation infrastructure and zoning for greater density have been shown to increase land values, either by providing access to jobs and amenities or by increasing the profitability of a development, as Korngold documents in the report.
“Without land value capture, this increased land value remains exclusively in private hands despite the public actions that created it,” Korngold writes.
The report is intended for state and local policy makers, city planners, economic development officials, civic leaders, lawyers, advocates and other stakeholders.
“Gerald Korngold provides an all-too-rare pragmatic insight into land value capture, a subject that excites great passion among theorists and practitioners alike,” said Ian Carlton, senior economic adviser for ECONorthwest, an economics consultancy firm. , finance, and planning. “It clearly explains many of the value capture options that one could implement in the US context.”
The report can be downloaded for free from the Lincoln Institute website: https://www.lincolninst.edu/publications/policy-focus-reports/land-value-capture-in-united-states
The Lincoln Institute of Land Policy seeks to improve the quality of life through effective land use, taxation, and management. A private, not-for-profit operating foundation whose origins date back to 1946, the Lincoln Institute researches and advocates creative approaches to the earth as a solution to economic, social and environmental challenges. Through education, training, publications and events, we integrate theory and practice to inform public policy decisions around the world.
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SOURCE Lincoln Institute of Land Policy