MAPC land pooling symposium presentation 5 11 2011
Land Pooling: A Possible Alternative to Eminent Domain and Tool for Equitable Urban Redevelopment May 11, 2011, 9:00 am – 12:00 pm
About MAPCThe mission of the Metropolitan Area Planning Council(MAPC) is to promote smart growth and regionalcollaboration in Metropolitan Boston, through public policyresearch and advocacy, technical assistance, mapping andanalysis, and regional planning. Our work is guided by ourregional plan, "MetroFuture: Making a Greater BostonRegion."The MAPC planning area consists of 22 cities and 79 townsthat include coastal communities, older industrial centers,rural towns and modern cities.
About Lincoln Institute of Land PolicyThe Lincoln Institute of Land Policy is a leadingresource for key issues concerning the use,regulation, and taxation of land. Providing high-quality education and research, the Institute strivesto improve public dialogue and decisions about landpolicy.
Agenda• Welcome (10 minutes)• Overview of Land Pooling (40-45 minutes)• Land Pooling Process in a U.S. Context (40-45 minutes)• Break (10 minutes)• Land Pooling in Massachusetts: Discussion and Q & A (40-50 minutes)• Next Steps (10-15 minutes)
Why Land Pooling?• Cities must transition in order to meet current needs and future demands• We need options that engage – not marginalize – property owners• We need solutions that create less opposition on compensation and other matters important to residents
Land Pooling for Economic DevelopmentEminent Domain Land Pooling• Top-down: government • Bottom-up: stakeholder driven driven• cash based: property • Equity-based: property owners paid out owners contribute in• Judicial-administrative • Democratic-participatory Process process
Overview of Land Pooling William A. DoebeleAuthor and Professor of Urban Planning and Design Emeritus, Harvard University
Overview of Land PoolingLand pooling is a land assembly process that isused for developing and redeveloping real estate.Other names: • Land Readjustment (South Korea and Japan) • Land Consolidation (Europe) • Land Pooling (Australia)Google “Land Readjustment” for a literature review on the topic
Overview of Land PoolingBefore After (Source: Larsson, 1997)
Overview of Land PoolingProperty owners work with local government ordevelopers to reconfigure parcels for moreoptimal development and redevelopment in sucha way that increases total land value.During an actual land pooling process, a numberof private parcels is temporarily put intocommon ownership and later reallocated to anew highest and best use.
Overview of Land PoolingLand pooling wasconceived in 1791when GeorgeWashington(a former landspeculator) and hisassociates used it tofinance and buildthe new capital inWashington, DC Plan of the City of Washington," March 1792 (Source: Library of Congress)
Overview of Land Pooling1791 Land Pooling Process in Washington, DC:• Farm owners transferred titles to Mr. Washington in trust• Mr. Washington authorized a plan outlining street layout, public sites, private urban lots, etc.• Federal government paid landowners for sites of public buildings• Half of remaining lots were returned to original owners; half were retained by the federal government
Overview of Land PoolingThe legislativeorigins of landpooling wasestablished in 1902by Franz Adickes,mayor of Frankfurt-am-Main, Germanywith the goal ofimproving theefficiency offarmland. (Frankfurt-am-Main, Wikimedia Commons)
Overview of Land PoolingLand pooling process for farmland in Germany:• Farmers temporarily put land titles in a common pool• Plan for more rational farmland boundaries was made• Titles were assigned back to farmers according to the plan
Examples of Land PoolingFirst major urbanuses of landpooling: After the1923 Great Kantoearthquake (Toyko),land poolingallowed the city toaddress a medievalstreet pattern andrebuild withminimum use ofpublic funds. (Source: Yokohama Central Library)
Examples of Land PoolingFirst major urban uses of land pooling (continued)• Japan: Rebuilding of Nagoya, Osaka, Hiroshima and Yokohama after World War II. It was also used for land acquisition for ―Bullet Train‖ lines and stations.• South Korea: • 60% of the urban expansion of Seoul was accomplished through land pooling (1984 data). • 30% of the urban expansion of Daegu was accomplished through land pooling. • Today, 35% of the urban expansion in Korea (1990 data) is accomplished through land pooling.
Overview of Land PoolingLand Pooling has also been used in Bhutan, France,Finland, Germany, India, Indonesia, Israel/Palestine,Nepal, the Netherlands, Sweden, Taiwan, Thailand, and inmany other parts of the world.Historically it is has been used as a means to: • Capture land value increments to cover urban development costs • Adjust outmoded property boundaries
Overview of Land PoolingIt has also been recognized as a tool to: • Facilitate land acquisition for urban development – speeding up the development process • Allow existing landowners to share the wealth generated from urban development • Promote housing development • Avoid gentrification (Home, 2002 and Hong, 2010)
How Does Land Pooling Work?Before After(Jabatan Perancangan Bandar Dan Desa - Senanjung, Malaysia)
How Does Land Pooling Work?(Source: Hong, 2010)
How Does Land Pooling Work?1. Landowners volunteer to pool. Law provides: If a super-majority agree, minority must participate.2. Agreement on development plan3. Every fourth lot designated as ―cost-equivalent‖ lot4. As lots are sold, money from ―cost-equivalent lots‖ pay off infrastructure costs.5. If calculations are correct, land will be urbanized or redeveloped at no public cost.6. Remaining urban lots are returned to to original owners of land, as close to original locations as possible.
How Does Land Pooling Work?Before After (Source: City Planning Bureau of Nagoya, Japan, 1982)
How Does Land Pooling Work?Projects can be initiated by private owners or public agencies LR Projects in Japan Initiated by Different Entities (% of total land area: 1954-2000) (Source: Kiaytaka, 2002)
How Does Land Pooling Work?Sample Calculation of Net GainsValue of ten acres of undeveloped land $1,000,000Total cost of planning, subdividing, servicing $600,000Total value of urban lots created $3,000,000Net gain in value $2,400,000Sale of 25% of urban lots would pay cost of infrastructure
Elements Essential to Successful Land Pooling• Premise of a strong land market• Land owners must believe final profits will be greater and land is worth the negotiating time• Reliable ownership records (cadastres)• Trained and credible assessors• Resolution of potential disputes through agreement or addressed by enabling legislation
Questions?Before After (Source: Kaohsiung Municipal Government, 1979)
Land Pooling in a U.S. Context James Freas Regional Planner, Metropolitan Area Planning Council Yu-Hung HongSenior Fellow, Lincoln Institute of Land Policy and Assistant Visiting Professor, Massachusetts Institute of Technology
Land Pooling in a U.S. ContextCase Study: Land Pooling in Hampton, VAGoals: 1. Illustrate the various features of land pooling 2. Explore the applicability of the ideas in a U.S. context
Background: Hampton, VAVisual from Buckroe Master Plan (Source: City of Hampton, VA)
Background: Hampton, VAVisual from Buckroe Master Plan (Source: City of Hampton, VA)
Background: Hampton, VA City Owned Three Cooperating Landowners Large Property Owners Remaining Property Owners Public Park
Enabling Conditions for LP in HamptonProperty Characteristics:1. High differential increments in land values before and after land pooling project.2. Government already owns area in yellow3. Major landowners in blue agreed to sell land together.4. Landownership (in blue, orange and red) is fairly concentrated. Two major property owners own area in red.
Enabling Conditions for LP in HamptonLandowner Characteristics:1. Affected landowners have motivation to stay in the neighborhood.2. Planning for redevelopment in the neighborhood has been participatory.
Enabling Conditions for LP in HamptonTechnical, Legal, and Political Characteristics:1. Technical skill is available for property assessments before and after land pooling.2. There was a precedent that treated parts of the area as a unified unit for redevelopment.3. The city is eager to revitalize the entire neighborhood.
ReflectionStrengths1. Developers with real estate development expertise can be involved in the early stage of redevelopment.2. Land Pooling that requires the approval of the majority of landowners to execute land assembly is more democratic than is eminent domain.3. Land pooling can avoid the heavy up-front capital requirement for property acquisitions by the local government.4. Land pooling may allow urban redevelopment to be self-financing.
Land Pooling Development Financing Profits Development Costs Project ValueProperty Cost Property Cost
ReflectionChallenges1. There is no precedent of land pooling legislation.2. Participation in planning and negotiation is time consuming for property owners.3. Public or private initiators of land pooling must have good negotiation skills.4. All participating parties—land owners, the city, and developers—will have to share redevelopment risks.5. Anticipated capital gains for participating landowners will not be realized until they sell their property.
ReflectionVisual from Buckroe Master Plan (Source: City of Hampton, VA)
Pooling Process for Hampton1. Discussion with large property owners2. Community meeting to discuss process3. First participation vote – 50% threshold4. Create entity to lead development process5. Engage development consultant team6. Market Study, Financial Feasibility, Initial Design work
Pooling Process for Hampton7. Draft development pro-forma8. Final participation Vote – 75%9. Final development plan, contracts signed, land titles pooled10. After redevelopment, property owners receive final compensation and Land Pool entity dissolved
Break (10 minutes)Next on the Agenda:• Land Pooling in Massachusetts: Discussion and Q & A (40-50 minutes)• Next Steps (10-15 minutes)
Land Pooling SymposiumLand Pooling in Massachusetts: Discussion and Q & A