Value capture: can it work in the U.S.?
The concept of value capture -- a system for engaging private landowners in the financing of public improvements that increase the value of their property -- has been a longstanding area of interest at the Lincoln Institute. This week the publication Next American City has as its premiere Forefront article a comprehensive piece on the subject, Money Grab: How Cities Can Recapture Investments in Public Infrastructure, by journalist Mark Bergen, author of the Econometro blog for Forbes.
Value capture is in use in Europe and Latin America -- the latter in the use of Certificates of Additional Construction Potential, or CEPACs, in cities like Sao Paulo, as Bergen explains. It hasn't caught on in quite the same way in the U.S., although as Lincoln Institute president Gregory K. Ingram points out, “We actually do a lot of value capture in the U.S. ... We just don’t use that term.” These policies include impact fees, licensing levies, inclusionary zoning policies, special assessment districts, tax-increment financing, public land leasing, and business improvement districts, to name a few.
No discussion of value capture would be complete without a reference to Henry George, whose ideas about a single tax on land are aptly covered in the article. Also quoted is Nico Calavita, co-editor of our book Inclusionary Housing in International Perspective, which examines strategies in Europe and elsewhere to ensure affordable housing in new residential developments built by the private sector. Bergen covers value capture initiatives for infrastructure financing in the Bay Area, Chicago, and the Dallas-Fort Worth area, in the development of the rail project the Cotton Belt.
Value capture was the subject of the Land Policy Conference in 2011, and the proceedings were published in the book Value Capture and Land Policies.