Land Readjustment for Value Capturing: A New Planning Tool for Urban Redevelopment

By van der Krabben, Erwin; Needham, Barrie | The Town Planning Review, November 1, 2008 | Go to article overview

Land Readjustment for Value Capturing: A New Planning Tool for Urban Redevelopment


van der Krabben, Erwin, Needham, Barrie, The Town Planning Review


Many urban redevelopment projects include expensive infrastructural works. In order to find funds for such infrastructure development, city planners are increasingly looking for opportunities for 'value capturing' from related property development. The argument is: investment in new infrastructure improves the accessibility of the locations connected to this infrastructure, with the result that property values in those locations increase. Based on this supposed relation, municipalities negotiate with property owners and developers to get them to finance part of the infrastructure costs. This may take place, for instance, in redevelopment projects around stations, thus linking public development of infrastructure to private development of property. However, the available legal instruments are not effective. This article explores a new legal instrument, namely urban land readjustment. The argument is supported by estimates of the potential extra property value in station areas resulting from public infrastructure investment. We argue that such a legal instrument, which is already in use in some countries, may be a valuable new planning tool in the Netherlands and elsewhere.

In many countries, urban planning increasingly involves redeveloping existing urban areas. Often, the redevelopment process is difficult, since it can take a long time to assemble all the plots and there are great financial complications. Three characteristics of urban redevelopment projects are held responsible. First, these areas often have fragmented land and property ownership (Buitelaar et al., 2008), or private developers already have strategically acquired land, speculating on future profitable redevelopment opportunities. Secondly, redevelopment projects usually include the provision of different kinds of services for public use - such as playgrounds, parks, and road and public transport infrastructure - which can be expensive. Such public works usually increase the value of the real estate in and around the development area, but it is difficult to capture that value increase. Thirdly, an area in need of redevelopment has many existing relationships with adjacent areas, which makes it difficult to draw the boundaries of the redevelopment area. This article addresses those typical urban redevelopment obstacles in more detail and searches for a new planning tool to deal with them.

We concentrate on the redevelopment of railway station areas, because this kind of project is common in many European cities and redevelopment there often encounters the above-mentioned problems of long duration and financial complications. In many cities, railway station areas were not part of their economic centres. Urban development often 'turned its back' on the station area. People arriving by train left the station area immediately, people did not want to live there, and station areas did not attract companies to locate in the vicinity. However, in the last decade this situation has changed completely. Partly as a result of the high-speed train network, local governments and private developers have initiated plans for redeveloping station areas, in order to make them economic centres and/or attractive living areas (Bertolini and Spit, 1998). According to Pels and Rietveld (2007, 2044):

Railway-related issues, be it the development of terminals for high-speed rail, the construction of high-quality office areas near railway stations, or the introduction of light rail, have become important themes in policies to revitalize these cities

Famous examples include (plans for) station area redevelopment in Lille, Stuttgart, Lyon, Berlin, Amsterdam and London (Van der Krabben and Van Dinteren, 2000). In the Netherlands, many smaller towns as well, such as 's-Hertogenbosch, Arnhem, Breda, Eindhoven, Schiedam and Amersfoort, have initiated station area redevelopment plans. The plans offer interesting opportunities for the related development of shops, apartments, etc. …

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