HousingWiki

Value capture

Revision as of 23:24, 10 February 2018 by imported>Jhestia

Value capture is a type of public financing that recovers some or all of the value that public infrastructure such as transit generates for private landowners. The concept may also be applied more generally to methods of capturing the value gain that result from upzoning or any change in the environment that is not attributed to actions of the landowner -- this is also called Land value tax.

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Description

"Public investments, such as building transportation or sewer facilities, can increase adjacent land values, generating an unearned profit for private landowners. The unearned value (increases in land value which otherwise profit private landowners cost-free) may be "captured" directly by converting them into public revenue (see Georgism). Thus, value capture internalizes the positive externalities of public investments, allowing public agencies to tax the direct beneficiaries of their investments.

"Urban planners and finance officials are often interested in value capture mechanisms, for at least two reasons: 1) because they offer a targeted method to finance infrastructure benefiting specific land, and 2) because some such investments can generate private investment in the area, which will more widely benefit the city (e.g., by providing employment opportunities, shopping and other amenities, and a more robust and diverse tax base.) It can be politically useful to capture for the city treasury a share of the positive externalities of city-financed investment. This can help address public concern about the fact or perception of unfair windfalls when specific owners’ land values increase after urban infrastructure investment is paid from general city revenues.

"Although it is not always talked about as such, the most common value capture mechanism is the general real property tax, with no special features other than regular assessment of market value; this is because the common real estate tax includes the less known land value tax. The value of any given land is determined by its proximity to various amenities (both public and private). Thus, for example, when a new subway station or highway interchange is installed, land near the new facility becomes more valuable. Investment in capital improvements to land can synergistically generate capital investment in other nearby locations, which further increases land value. Thus, even if the rate of taxation does not change, the tax revenue generated from properties which benefit goes up by way of higher land values and increased development. The effectiveness of value capture depends, of course, on a smoothly functioning ad valorem property or land value tax system, with regularly updated assessments."

 

Application to proposed California legislation SB 827, Transit Zoning Bill 

Schweitzer, Lisa. "What I’d fix about SB827, aka that white paper has sooooooo been written already."  02/09/2018. 
https://lisaschweitzer.com/2018/02/09/what-id-fix-about-sb827-aka-that-white-paper-has-sooooooo-been-written-already/. 

"Since we are with BS827 setting up special districts around transit stations anyway, we should set up them up special assessment districts, use the transit-value and up-zone value in land appreciation to derive revenues to put into a fund for: a) rental vouchers; b) school districts with new student need from the new developments and c) transit operations and support."  

on general idea of taxing land value, Schweitzer notes:  George, Henry. Progress and Poverty. 1879. http://www.econlib.org/library/YPDBooks/George/grgPPCover.html. Manville, Michael, Paavo Monkkonen, and Michael Lens (2017). "A better way to solve the housing crisis—tax land, not development." LA Times, JUL 19, 2017. http://www.latimes.com/opinion/op-ed/la-oe-manville-monkonnen-linkage-fee-20170719-story.html.

SOOOOOOoo is there any info on the value capture strategy of which you speak? Yes! Yes there is! It has been bigily studied and described! It’s been implemented I places. It’s been evaluated

There’s this big huge lineup of reports from researchers at the University of Minnesota.

Center for Transportation Studies, University of Minnesota. "Value Capture for Transportation Finance." 2008-2010.
http://www.cts.umn.edu/research/featured/value-capture. ].

 

There’s this discussion The Man Himself David Levinson writing for CityLab.


Levinson, David. "How to Make Mass Transit Financially Sustainable Once and for All." CityLab, JUN 5, 2014.
https://www.citylab.com/transportation/2014/06/how-to-make-mass-transit-financially-sustainable-once-and-for-all/372209/.
 

This friendly brief from APTA!
 

American Public Transportation Association (2015). "Value Capture for Public Transportation Projects:
Examples." August 2015. https://www.apta.com/resources/reportsandpublications/Documents/APTA-Value-Capture-2015.pdf.]

 

This friendly informer from the High Speed Rail Advocacy folks.

 

 

This nice summary paper from an open access journal.

 

 

This nifty book from the Transportation Research Board (a secret Illuminati organization if there ever was one).

 

 

 

This awesome report from Brookings.

 

 

 

This cool study on TOD Value Capture in Massachusetts.
 

This little blurb from Smart Growth California folks at SCAG who have a really helpful discussion of tools that may be used in California!
 

 

This fantastic report from the Lincoln Land Institute. That has a GREAT submission from Mr. Windfalls for Wipeouts Himself, Dean J. Misczynski, who fist published (brilliantly) about this particular topic in 1978.


From FHWA here.

 

We might, for example, just tweak this approach a bit.

 

 

Some private consultants have been working on this VERY IDEA in affordable housing!

 

 

OH BOY OH BOY IT’S GOT ITS OWN WIKIPEDIA PAGE!! (A little light; David L, go fix it. )

 

New York City is eyeballing it.

 

And of course, the very nice VTPI Report from Jeffery J. Smith and Thomas A. Gihring, which is a GIGANTICALLY LARGE annotated bibliography. 

 

 

 

References

 

 

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