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Land Value Capture
The document discusses preliminary OECD work on land value capture (LVC) and its significance as a tool to influence land use through public policies. It highlights the importance of coordination between different levels of government and the need for effective frameworks to facilitate LVC adoption across OECD countries. The document also raises questions regarding revenue distribution, integration with planning frameworks, and the role of national governance in local implementation.
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Land Value Capture
- 1. PRELIMINARY OECD WORK ONLVC Abel Schumann Economist OECD
- 2. 0 5000 10000 15000 20000 25000 30000 35000 Property (buildings, infrastructure) Land Machinery & Equipment InventoriesOther natural resources Intellectual property Other non financial assests Cultivated biological resources Land and property are by far the most important forms of capital Disaggregated capital stock (six-country sample)U$ billion PPP Note: Data covers Australia, Canada, Czech Republic, France, Japan and Korea. Source: OECD National Accounts Table 9B
- 3. How public policiesinfluence land use How land is used Public policies aimed at steering land use • Spatial planning • Transport planning • Land use planning • Environmental regulations • Building code regulations Public policies not targeted at land use • Tax policies • Transport taxes and subsidies • Fiscal systems and inter- governmental transfers • Agricultural policies • Energy policies How land is permitted to be used How individuals and businesses want to use land. How local governments want to allocate land.
- 4. 0 2 4 6 8 10 12 14 16 18 Impact fees Joint developments Landvalue/split rate property tax Land banking Betterment levies No value capture Non-Europe Europe Value capture in 32 OECD countries Source: OECD (2017), Land-use planning systems in the OECD Number of countries using each instrument
- 5. Country / Tool LVT Betterment contribution Impact fees Develope r exaction Development rightssale Land asset management Land readjustme nt Joint Development Brazil X X X, but limited X Ethiopia X X Korea Abolishe d in 1998 X X X, but used to be stronger X Netherl ands X X Unclear X (active land policy) X X Poland X X, but limited X, but limited use X, growing PPP sector Current work
- 6. • Lessons fromthe literature – Consensus that LVC instruments are rational, efficient and should be used more extensively Why are they not more widely adopted? – No overarching theory of what makes LVC work: difficult to identify enabling factors – Individual cases of successful use of LVC tools are easier to identify than successful national frameworks Current work
- 7. • Multi-level governanceand link between policy making at national, regional and local level – Role of national frameworks? – Co-ordination across levels of government? – National role in local implementation? • How can national frameworks account for differences in local characteristics? – City size? – Local administrative capacity? – Economic conditions? • Are there common lessons that hold true in OECD countries across: – Form of government (e.g. federal or unitary)? – Legal system? – Level of economic development? – Country size? OECD angle on LVC
- 8. • Revenue distribution –How to use LVC funds to reduce intra-urban/metropolitan disparities? Link to metropolitan governance and local public finances • How to integrate LVC with spatial and land-use planning frameworks? Coordination between fiscal and land-use planning departments within local administrations • How to increase political support for LVC – Trust in government transparency and accountability • Can/should national governments make LVC tools mandatory? – If yes, to what degree? Further research questions
- 9.