Region: Global
Country: Global / Non-Specific
Keywords: Innovative Revenues for Infrastructure
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Document Summary:
This paper sets out to explore what worked and what didn’t work in implementing LVC mechanisms in three cities across Latin America, Africa, and South Asia: São Paulo, Brazil; Addis Ababa, Ethiopia; and Hyderabad, India. These growing cities represent a range of incomes, urbanization patterns, maturity of land regulations and governance structures, and experiences implementing LVC. The case studies were conducted by experts on the ground who are familiar with the projects studied in each city and who are connected to local decision-makers and project stakeholders.
Document Details:
Highlights:
- Public and private actions can induce increases in land values. The process of land value capture (LVC) involves converting increases in the value of land driven by government investment or action back into public revenue that may be used for a variety of public purposes.
- LVC mechanisms like property taxes, charges for building rights, and development fees exist in cities around the world, but many of these remain ineffective due to lack of strong institutions and land-governance structures and subversion by political or private development interests.
- This paper examines LVC experiences across three cities in the global South—São Paulo, Brazil; Addis Ababa, Ethiopia; and Hyderabad, India—to identify factors that lead to both successful LVC and positive equity and economic benefits for the community, as well as failures or negative equity and economic impacts.
- From case studies conducted in 2018, we find that LVC mechanisms delivered positive economic and mixed equity outcomes in São Paulo and have so far delivered very few observable economic and equity benefits in both Hyderabad and Addis Ababa.
- Our analysis highlights the relevance of legal and planning processes (especially with respect to land tenure), available financial instruments, real estate market conditions, and government capacity in harnessing the economic benefits of LVC in ways that enhance equity.
Updated: August 8, 2023