Abstract
In a context of global competition for capital, austerity politics, municipal entrepreneurialism and financialization, land is increasingly seen as a source of money for fiscal revenue. Mechanisms of land value capture, as a consequence, have accelerated forces of land monetization and commodification in recent years. This special issue is a collective attempt to rethink the concept, practice and politics of value in land development. Seven authors bring two, still largely separate, discussions into conversation. One concerns the politics of land development that has emerged through the expanding use of regulatory land use tools oriented single-mindedly around the capture of monetary value from land. A second theme focuses on how the city’s urban future is produced through social and political contestation constrained by the valorization of land’s exchange value. Taking a longer and relational point of view, authors in this issue examine what is at work – politically, economically, fiscally, institutionally and ideologically – to enable land development and land value capture to become an increasingly used solution to fiscal revenue generation in communities around the world. This issue also fuels our imagination to consider how we might discuss social futures rooted in social values. There is no finality to the kind of present-future relationship that land value capture helps to shape. Value is an intentional choice and is performed, and if we take such a value concept as our starting point, then value practices hold the key to whether we can achieve a more socially desired or intended end.
In a context of global competition for capital, austerity politics, municipal entrepreneurialism and financialization, land is increasingly seen as a source of money for fiscal revenue. Mechanisms of land value capture, as a consequence, have accelerated forces of land monetization and commodification in recent years. Local governments actively facilitate the intensification of land development with the rationality that they will recuperate some fraction of the resulting land value increase (in-kind or financial) which they will then direct towards public purposes. To extract this monetary value, states increasingly seek strategies to make land legible to capital investment. To do this, local governments design and implement an array of regulatory tools, usually in consultation with real estate professionals and with the help of local intermediaries. Examples abound. US cities use Tax Increment Financing to fund urban redevelopment by borrowing against future tax revenues; Mumbai redevelops informal settlements using transfer of development rights; local governments use land readjustment schemes to clear large swaths of farmland for urbanization; and planners in cities in the Global North and South cling to measures of density bonusing as a source of private funding for public benefits, such as social housing, community facilities and urban amenities (Christophers, 2014; Gidwani and Upadhya, 2023; Liong et al., 2020; Pati, 2022; Pérez, 2020; Sclar, 2020; Shih and Shieh, 2020; Weber, 2021; Wolf-Powers, 2010).
Polanyi (2001 [1944]) argued many decades ago that it is a fiction to think of land as something thing-like, as a pure commodity that can be parsed and parcelled out from the larger social relationships around it without causing major social and human destruction. A large and established body of scholarship has provided clear and abundant evidence that to treat land solely as a reservoir of money to be extracted is highly socially disruptive (Ghertner and Lake, 2021; Li, 2014). The doubling down on land development as a currency for pursuing revenue, growth and modernity has all too often led to displacement, accumulation by dispossession, social and environmental degradation, cultural otherings and the dismantling of democratic economy (Balakrishnan, 2019; Otsuki, 2024; Safransky, 2023; Shatkin, 2017). Regulatory tools and processes of value capture are often highly technical, making it difficult for the public to unpack their workings and effects. As a result, the ‘calculative turn’ ushered in by land development techniques often deflects debates around land away from inquiries based on people’s lived urban experiences and into pecuniary negotiations dominated by experts equipped with pro forma analysis (McAllister, 2017; Shih and Chiang, 2024). Even when local communities are involved in negotiation, poorer communities face the sheer reality that the uneven power structure has already put them in a disadvantaged position while wealthier ones have more resources to maintain the privileged status quo (Wolf-Powers, 2010). The financialization of the urban process, the political economy of a real estate-oriented urban economy and the danger of parochialism have raised serious questions about whether embedding social provision in public-private land development deals is another urban incarnation of the telos of neoliberalization (Lake, 2022; Tapp, 2020). Yet, increasingly, cities and communities are ensnared in an entrenched politics of land where they envision few alternatives but to make themselves value capture-ready (Nolan, forthcoming).
This special issue is a collective attempt to rethink the concept, practice and politics of value in land development. Supported by an Urban Studies Foundation Seminar Series Award (USF-SSA-210213), an international group of urban scholars collaborated over a period of 1.5 years leading up to a 2-day virtual conference in 2022. Seven authors bring two, still largely separate, discussions into conversation. One concerns the politics of land development that has emerged through the expanding use of regulatory land use tools oriented single-mindedly around the capture of monetary value from land. A second, and consequent, theme focuses on how the city’s urban future is produced through social and political contestation constrained by the valorization of land’s exchange value. These two conversations have taken on an additional layer of practical importance as urban planners and community organizers are increasingly tasked to negotiate with the private sector in the organization of land deals on behalf of the public. Taking a longer and relational point of view, authors in this special issue examine what is at work – politically, economically, fiscally, institutionally and ideologically – to enable land development and land value capture to become an increasingly used solution to fiscal revenue generation in communities around the world.
New political economic and fiscal conditions generated by capitalist urban processes and entrepreneurial governance, drive decisions and actions in many municipalities and communities to enlarge land rent gaps to enable revenue extraction. This is evident, for example, in López-Morales et al.’s work (2024) on property taxes in Santiago, Chile, where especially low property tax rates and a structure that does not allow cross regional tax sharing create a lost opportunity to address social inequity. It is also present, in a different way, in Sorensen’s work (2024) on state efforts to enable intensified land development in Toronto, Canada, alongside a complex set of land value capture tools which have brought much needed revenue to the city. Several authors in this issue examine ‘pre-story’ conditions in some communities that are intricately intertwined with the treatment of land as a source of money. Otsuki (2024) traces how the teleological logic of modernization has amplified the belief and practice that the economic value generated by development-induced displacement is beneficial to the public in Mozambique. She outlines how this belief has produced the ‘commodification of livelihoods’ for villagers relocated by the Limpopo National Park project. Meanwhile, Shih and Chiang (2024) reveal how planners’ epistemic assumptions about good city form are driving force behind the design of generous density bonuses that enable real estate investors to do large-scale land development, which in turn, has contributed to aggressive land brokering and rising land prices in Taipei, Taiwan.
But what is the ‘value’ that is being extracted from land through the mechanisms of value capture? The focus of value capture tools on tangible, quantifiable, ‘capturable’ benefits is often achieved by making land more financially extractable, but this practice obscures and often erases those intangible, incalculable but very real dimensions of value – aesthetic, ecological, psychic, spiritual and otherwise – from the calculus of value to be extracted (Lake, 2024). And the resulting changes to the built environment and urban transformation have wide-ranging, long-lasting and uneven impacts on different segments of the population in different parts of the city. That the decisions and processes that enable that extraction are often shaped by technical staff who manage mundane regulatory and technical details leaves the practice of value extraction not especially accessible to the public. This distances the inner workings of these processes from everyday people, making it more difficult for them to problematize a politics of value. As a result, the often highly politically contested process of land development is rendered as an individualistic, calculative and expert-led matter rather than one that the public can question, much less influence or direct.
This special issue seeks to reveal the technical processes that shape land value and the future city and to bring to the forefront the point that the value we assign to land is a political question with social consequences. When public policy objectives are addressed through calculative techniques of land development, the politics of land value are moved outside the realm of democratic deliberation. The result leaves questions of political contestation unexplored related to the effects these tools have on the (re)distribution of landed benefits and the production of space as well as on the structure and processes of democratic governance including political participation and the role of the state. Each time these tools and processes are used, they not only reshape the future city, ushering in a predetermined speculative urbanism, but by constraining the spaces of discussion where we ask one another what we want our communities to look like and who they are for, they reshape the very way we govern.
The authors in this special issue bring to the forefront three key questions.
Core inquiries
How do tools of land development and value capture perform value?
Land has many affordances, as Polanyi (2001 [1944]) observed, and it is through a social construction and political negotiation process that a value is assigned to land. Yet, the practice of land value capture centre almost exclusively around land’s economized value and its extraction. With the accelerated turn to municipal entrepreneurism, and with so few resources at local governments’ disposal to enable growth and raise money to secure social benefit, land value capture becomes an appealing and critical tool of governance, and cities feel the need to make themselves capture ready. Yet, calculative techniques also have a performative quality. They do not just objectively unlock the thing-like, commodified value in land, they also actively construct and valorize land’s monetary value that they are designed to capture.
Tracing the original idea of value capture envisioned in Henry George’s single land tax proposal, juxtaposed against its applications in today’s highly financialized urban world, for example, Wolf-Powers (2024) emphasizes that value is not a fixed and invariant category. There has been a philosophical and conceptual shift in land value capture from redistributing ‘unearned increment’ to the public, in the Georgist formulation, to the right of private owners and developers to commodify and extract profit from land. George’s concept of value, as Wolf-Powers explains, is a progressive contribution to the collective good, while the value implicit in today’s land development practices is a speculative gain in the asset column of private interests. Lake’s (2024) assessment of inherent, axiomatic assumptions of value – a practice he calls magical thinking – notes that the value practices at work do not emerge at random but presuppose a particular conceptualization of value that is then reified through the practice. Value, Lake argues, ‘is performed neither randomly nor universally but intentionally . . . in response to the specific circumstances presented by a problematic situation’ (page 1850), and what constitutes that problematic situation is up for political contestation.
How does the state reshape its role in the public-private relationship while engaging itself deeper in land development?
As land development becomes central to city efforts to generate social benefit – including revenue for redistribution – entrepreneurial cities are reshaping public-private relations with the adoption of each land value capture policy and its implementation. Capturing value from land entails creating rules that alter land use in ways that generate sufficient profit to engage state and non-state partners. While this might entail rules that make the transfer of development rights or density bonusing possible, the actual development process is often shaped by the intersection of a broad set of policies. Sorensen (2024) describes the decades-long development of a complex set of policies designed to extract revenue from high density development in Toronto to fund social projects. Bloom (2024) points out how some institutional changes enable land development in London by moving the management of these processes to limited liability companies, resulting in limited democratic accountability.
But changing the rules is not always enough to get land development done. Absorbing risk is an increasingly recognized role for the state in the neoliberal financialized era. Bloom (2024) discusses risk as relational, as when states absorb risk to make development happen, as those who study tax increment financing have long observed (Weber, 2021). Bloom notes that the local state in London created a new institutional form to facilitate land development by borrowing at below market rates from the British Treasury to enable it to capture rent gaps. Bloom observes that this type of speculative gamble is not always productive and, critically, the entire prospect of creating fiscal revenue through land development is predicated on continually rising land and housing prices. Technical measures of density bonusing are often an effective catalytic agent valorizing land’s monetary value and driving land prices higher as illustrated by Shih and Chiang (2024) in the case of New Taipei City.
How do value practices shape the city’s urban future?
The practices of land development and value capture today are especially important because they shape the city’s urban future, enabling some paths while foreclosing others. This can have differential impacts on different people and places. On the one hand, a growing body of scholarship provides mounting evidence pointing to the future-proofing effects of calculative techniques on speculative urbanism. For example, Weber (2002, 2021) has shown, in a series of articles, how value capture techniques including TIF, discount rates, and property appraisal methods, etc., embed an inflationary future in capitalist urban redevelopment. Echoing the temporality of value capture, authors in this special issue detail the similarly patterned intensification of land development produced by idiosyncratic tools in diverse contexts. For example, Wolf-Powers (2024) observes that current practices of land value capture ‘supercharge institutions that view land and housing purely as assets’ (page 1748), which deepens the capitalization of land value increase by private owners. Shih and Chiang (2024) find that the formulaic rules of density bonusing in New Taipei City boost profit for real estate development in advance of their actual granting, emboldening aggressive land brokering, buying and selling of farmland, which churn up urban land prices. Speculative engagement with land almost always generates more uneven impacts and makes the future more uncertain. Bloom’s work shows that public land in London is the new frontier of such a risk-laden future as the local state has deepened its intervention in the politics of risk. López-Morales et al. (2024) observe how land value capture through property taxes is insufficient to address equity because of economic segregation across the Chilean metropolitan area. A land market of ever rising prices and extractable revenue seems to become the single telos to which value capture in its present state aspires.
Conclusion: (Re)Opening spaces for political contestation, public inquiry and democratic deliberation
The articles in this issue fuel our imagination to consider how we might discuss social futures rooted in social values. Though land development practices and the politics of land value have been moving towards processes that limit opportunities for democratic engagement, the very fact that land value is the product of political negotiation suggests the potential for change (Lake, 2024). There is no finality to the kind of present-future relationship that land value capture helps to shape. Because there is no one definition of value, people continue to understand and think about the value of land in a plurality of ways. How people conceive of value affects how they go about realizing it. Even when formal processes continue to value land in certain ways, people may live their lives in ways that value land differently. Informality abounds. This reality places extra weight on Lake’s (2024) observation about the importance of ‘expanding the space for a politics of value to move toward desired outcomes’ (page 1843).
A democratic conceptualization of value will unfold in different ways in different instances. For example, Otsuki (2024) notes that people displaced from the Limpopo National Park have re-established a collective that counters the commodification of livelihoods brought about by the development project. Taking a more proactive stance, Shih and Chiang suggest how to move density bonusing from a technical and financial domain to one for community engagement and public inquiries. Outside this special issue, Shieh (forthcoming) shows how Vancouver’s value capture scheme, termed Community Amenity Contribution, has produced a small but socially meaningful number of units of affordable co-living housing. She makes a compelling case for shifting the policy focus from how much is captured monetarily to how to transform captured value for progressive outcomes, in this case, non-commodified housing. In these cases, the possibilities for realizing alternative telos and aspirations lie in the future. Value is an intentional choice and is performed, and if we take such a value concept as our starting point, as Lake argues (2024), then our value practices hold the key to whether we can achieve a more socially desired or intended end.
Footnotes
Acknowledgements
Robert Lake read early drafts of this article and provided constructive comments. We are grateful for the discussions and feedback received from participants at the virtual conference ‘Negotiating Social Futures: The Politics of Land Development and Value Capture During and After the COVID-19 Pandemic’ on September 23–24, 2021. The conference was one of three events supported by an Urban Studies Foundation’s Seminar Series Award (USF-SSA-210213). Shortcomings remain the sole responsibility of the authors.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This theme issue is part of a larger project supported by an Urban Studies Foundation’s Seminar Series Award (USF-SSA-210213).
