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Capturing development value, principles and practice: why is it so difficult?

Author

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  • Crook, Tony
  • Whitehead, Christine M E

Abstract

Land prices have risen significantly in England over the last two decades, generating debate about how far ‘unearned increments’, particularly those arising with planning permission, can and should be taxed for the public good. In principle, taxing such increases should be easy, although experience suggests otherwise. Taxing them, like any other tax, should be judged by how much is raised together with three welfare criteria: do they promote a more efficient use of resources; achieve more equitable outcomes; and comply with taxation principles of revenue raising, fairness and administrative competence. The paper discusses the two main UK mechanisms: unhypothecated national taxation and negotiated local contributions for infrastructure and affordable housing, assessing how far they have met these requirements. Finally, the paper considers how the current system might be modified better to achieve the desired outcomes and whether there is a case for more fundamental reform.

Suggested Citation

  • Crook, Tony & Whitehead, Christine M E, 2019. "Capturing development value, principles and practice: why is it so difficult?," LSE Research Online Documents on Economics 101263, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:101263
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    File URL: http://eprints.lse.ac.uk/101263/
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    Citations

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    Cited by:

    1. Canelas, Patricia & Noring, Luise, 2022. "Governmentalities of land value capture in urban redevelopment," Land Use Policy, Elsevier, vol. 122(C).
    2. Nir Mualam & Andreas Hendricks & Vida Maliene & Eyal Salinger, 2021. "Value Capture and Vertical Allocations of Public Amenities," Sustainability, MDPI, vol. 13(7), pages 1-21, April.
    3. Vejchodská, Eliška & Barreira, Ana Paula & Auziņš, Armands & Jürgenson, Evelin & Fowles, Steven & Maliene, Vida, 2022. "Bridging land value capture with land rent narratives," Land Use Policy, Elsevier, vol. 114(C).
    4. Quintin Bradley, 2021. "The financialisation of housing land supply in England," Urban Studies, Urban Studies Journal Limited, vol. 58(2), pages 389-404, February.

    More about this item

    Keywords

    land value capture; planning obligations; S106; community infrastructure levy;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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