Urban Planning for City Leaders - Cities Alliance

Urban planning for city leadersCapture value from city extensionand renewalUnderstand how landvalue can be capturedDevelopers can be required to pay forinfrastructure in new areas. As developersacquire development permits, they may berequested to pay for the cost of infrastructurefor the area. They will in turn recover coststhrough land sales. The developer may beasked to build the infrastructure directlyor pay its costs as part of the developmentlicence. This is widely used to meet cityextension infrastructure needs. It requires clearplanning regulation, delivery capacity by theinfrastructure provider, and the capacity to linkdeveloper’s infrastructure to public systems,such as roads and trunk utility lines. In Cairo,Egypt, the central government transferred694 million square metres of desert to theNew Urban Communities Authority (NUCA) toaccommodate expected urbanization needs.In 2007, NUCA auctioned off land parcelswith basic infrastructure services for USD 3.12billion, more than recovering the cost of theinfrastructure investment. Some of this moneywas to be used to build a highway connectingthe new city to the Cairo Ring Road.Land-value gain resulting from infrastructureprojects can be taxed. “Betterment levies”are a one-time tax on the estimated land-valueincrease associated with transport and roadconstruction and improvements projects, a risetypically of between 30 and 60 per cent. Theselevies are difficult to administer, however, ifincreases are estimated on a plot by plot basisand are better calculated by area or city-wide,depending on the investment programme. InBogotá, Colombia, valorización has financedmore than USD 1 billion of public works,including 217 street, bridge and drainageimprovements. It takes into account ability topay, is payable over five years and is citywide, allof which have reduced public resistance.In Bogotá, Colombia value capture has financed more thanUSD 1 billion of public works © UN-Habitat/Laura Petrella134