What Are Land Value Capture Tools?

From São Paulo to Johannesburg, Land Value Capture (LVC) is helping fund affordable housing, upgrade informal settlements, and build climate-resilient infrastructure.

LVC tools allow governments to recover some of the land value they helped create — through public investments like transit, parks, or flood defences — and reinvest it back into communities.

So what does that actually look like in practice? Here’s a quick breakdown 👇

🔹 Development Charges
🔹 Betterment Levies
🔹 Land Readjustment
🔹 Inclusionary Zoning
🔹 Tax Increment Financing

Here are real-world examples of LVC tools being implemented in various urban contexts

🇧🇷 São Paulo, Brazil – Developer Exactions via “Outorga Onerosa”

– Tool: Selling additional building rights (CEPACs)

– Used For: Funding infrastructure and social housing

– Impact: Raised over $1B for upgrades in flood-prone, underserved areas, helping integrate informal settlements and reduce climate risk.

🇮🇳 Ahmedabad, India – Land Readjustment via Town Planning Schemes (TPS)

– Tool: Landowners contribute land for public use; remaining land is returned re-planned and more valuable

– Used For: Regularising informal settlements and improving drainage

– Impact: Low-cost, politically viable climate adaptation in vulnerable urban areas.

🇨🇴 Medellín, Colombia – Betterment Charges + Developer Contributions

– Tool: Landowners contribute to the cost of public upgrades that increase land value

– Used For: Transport, green spaces, and affordable housing

– Impact: Supported inner-city renewal while reducing displacement and boosting resilience.


🇿🇦 Johannesburg, South Africa – Inclusionary Zoning Pilot

– Tool: Zoning incentives requiring developers to include affordable housing

– Used For: Housing in up-zoned, well-located areas

– Impact: Promotes compact, low-emission development while protecting green spaces and supporting affordability.

Each tool has its own strengths — and risks — but together, they offer a powerful way to build more inclusive, climate-smart cities.

Sources:
– Urban Planning Law for Climate Smart Cities, UN-Habitat
– World Cities Report 2020 & 2024, UN-Habitat
– Global State of National Urban Policy 2024, UN-Habitat

Source:

https://www.linkedin.com/posts/un-habitat-united-nation-human-settlements-programme-_from-s%C3%A3o-paulo-to-johannesburg-land-value-activity-7342960977308512258-r1mP/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAtGGkQBsxwMBmX3lEJO8btihnfBCaHqTz4