Right of The City: Land Value Sharing

Urban development can create large land and real estate values. Although this value is created by the public either through governmental interventions or decisions, the value is often captured by private interests or for personal gains. The concept of land value sharing stresses the idea that personal gains from urban development should be shared with the public to limit real estate speculation and to generate public revenues to finance infrastructure such as urban transport, public spaces or amenities.

The General Organization for Physical Planning, the technical arm of the Ministry of Housing in Egypt, has put forth a proposal to amend the existing legal framework to allow for practical application of land value capture. This proposal is innovative in that it provides several scenarios for the government to collect the land value capture either through financial resources or through land.

During the event, experiences of Egypt in applying land value sharing instruments will be presented and discussed. While Egypt has adopted several land value sharing tools in its legal framework, the application on the ground is facing several challenges that many developing countries share. The question here is, how developing countries like Egypt can successfully apply land value sharing despite volatile and real estate markets that are not transparent, informal encroachments and the resistance of many citizens to pay.

In addition, an example from Latin America will be presented on land value capture as a tool for financing transportation projects. With cities rapidly growing, the demand for public transportation has never been greater, especially if cities are to grow sustainably. However, the cost of building public transportation is often too big for cities where budgets are often scarce. Land value capture has proven to be effective in leveraging the future increase in land value in order to finance public transport.