Conference Agenda

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Session Overview
06-13: Land Value Capture Experiences
Wednesday, 22/Mar/2017:
10:30am - 12:00pm

Session Chair: William Mccluskey, African Tax Institute, University of Pretoria, United Kingdom
Location: MC C2-125

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A Century of Unsuccessful Attempts at Value Capture? An Analysis of the UK’s Track Record

Richard Grover

Oxford Brookes University, United Kingdom

The UK has used a variety of devices to try to capture the increase in land value resulting from demographic or economic growth or consent for a change land use to a more valuable one. The Finance Act 1909 was strongly influenced by the ideas of Henry George. It proved difficult to implement but was abolished when the government lost power. Subsequently town planning acts in 1947, 1967 and 1975 and 1976 brought in betterment levies and powers for local authorities to acquire land. In each case the legislation was brought in by Labour governments and abolished by Conservative ones with evidence of development being held back in the expectation that the measure would be short-lived. Implementation in each case was complex. The 1990 Planning Act allowed the imposing of planning obligations and contributions from developers and a community infrastructure levy has sought to make this more systematic and predictable. Against the problems of these measures revaluations of business rates, stamp duty land tax payable by buyers and capital gains tax on sellers have encountered much less political opposition or implementation problems. These measures suggest that although betterment levies can be difficult to collect other taxes can perform similar functions.

Transformation Of Land To Land Lot, Value Gain, Land Speculation, And Opportunities For Sharing Value Increment: An Evaluation Of The Turkey Example

Gizem Var1, Yesi̇m Ali̇efendi̇oglu2, Sibel Canaz Sevgen3, Harun Tanrıvermis4

1ankara unıversıty, department of real estate development and mangement, Turkey; 2ankara unıversıty, department of real estate development and mangement, Turkey; 3ankara unıversıty, department of real estate development and mangement, Turkey; 4ankara unıversıty, department of real estate development and mangement, Turkey

Income from taxes constitutes the main revenue source of local and central governments in emerging economies. Urban services envisaged in development plans for rapidly growing urban populations are provided by local governments; however, available financial resources remain inadequate for effective, efficient and high quality service delivery. Especially in urban centers, the transformation of land to land lots and increasing residential density in the urban periphery place additional economic burden on local governments. In this context, a model proposal has been made towards controlling by taxation, which is an application tool of land lot policy, of urban sprawl process, increasing local government revenues and reducing revenue loss to a minimum in the Ankara Metropolitan area, of which scale is gradually growing and governance efficiency is declining. The results of the evaluation carried out in a 59.7 hectare study area in the Çukurambar Region in the Çankaya District of Ankara Province have shown that local governments’ tax revenues will increase by a factor of four by value increment financing. Using practices such as controlling the process of transformation of land to land lot, property tax, taxation of value increment, and reducing economic rent seekers’ tendencies of acquiring unearned increment will be possible.

Capturing Land Value after the Collapse of the Oil Economy to Finance Luanda's New Urbanisation

Allan Cain

Development Workshop, Angola

With the collapse of oil prices through 2014 and 2015 the Angolan state budget has been drastically reduced, and the government will not be able to provide investment and subsidies to continue building new housing and urban infrastructure.

Since the end of the civil war in 2002, the government of Angola has used Chinese credit facilities backed by petroleum-based guarantees to build prestige urban projects. The private sector, both international and local has been a major beneficiary of construction subsidies from the state. The private sector, however, has been reluctant to provide their own financing and invest in real-estate due to weak land tenure and the lack of legislative reforms to make a functional land market. Solving the problems around land may be a way to stimulate the engagement of private sector participation in providing financing for the housing sector.

The author argues that "land-value capture”, a method that provided financing for the growth of Chinese cities, should to be studied and could be adapted in Angolan cities. It could provide an opportunity to finance the large backlog in urban upgrading of basic service infrastructure and housing for the poor for cities like Luanda.

Does Ethical And Participative Land Based Financing Support Better Land Governance

M. Siraj Sait1, Jean Du Plessis2, Nuha Eltinay3, David Mitchell4

1University of East london, United Kingdom; 2UN-Habitat; 3Arab Urban Development Institute; 4Royal Melbourne Institute of Technology

The use of land to generate resources for its development and the reverse process of external investments into land development are well known. Not sufficiently explored is how or whether choices of financial arrangements affect individual relationship with land, and land governance. The essay explores examples of facilitating alternative, ethical and Islamic finance and outcomes for land governance.

The objective of the paper is to consider the possible correlation between participative/ethical finance models and improved land governance prospects. Ethical finance features of such closer reliance on land (asset based), profit and loss models and value imperatives promoting real or abstract notions that contribute to land governance are studied. The paper interrogates the construction of land financing as a limited question of availability without exploring the possible benefits of participative finance for land governance.