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1949 1270 Land Lines October 2011 Webster

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Land Lines

L I N C O L N I N S T I T U T E O F L A N D P O L I C Y
OCTOBER 2011
Large Landscape Initiatives
l
Scenario Planning
l
Land-Based Financing
l
State Fiscal Recovery
l
New Publications
Z F E A T U R E S
2 Exploring the Future of Large Landscape Conservation
JAMES N. LEVI TT
Notwithstanding evident federal budget constraints, myriad opportunities are available
to pursue projects that are expansive in scale, extensive in scope, and able to achieve measureable
conservation outcomes.
7 Scenario Planning and the Promise of Open Source Tools
J I M HOLWAY
Sustaining local communities will require mechanisms to envision and plan for the future
and to engage residents effectively in the process. Scenario planning is an increasingly valuable
way to address these efforts.
14 Land-Based Financing for Brazil’s Municipalities
DAVI D MI CHAEL VETTER AND MARCI A VETTER
Brazil’s chronically low level of public sector investment has resulted in serious infrastructure
deficits, often cited as an impediment to its economic development. Municipalities need incentives
to increase their fiscal space for investment and other priorities.
20 The Long Road to State Fiscal Recovery
DONALD BOYD
The recent recession has been recognized as the worst in memory, and its effects are still
being felt. Less well understood is the fact that this recession has been far worse for
state governments than the drop in GDP would suggest.
Z D E P A R T M E N T S
1 Report from the President
24 Faculty Profile: James R. Follain
26 New Lincoln Institute Publications:
High-Speed Rail: International Lessons
for U.S. Policy Makers
Property in Land and Other Resources
28 Working Papers/Program Calendar
29 What’s New on the Web
25%
Cert no. SCS-COC-001366
EDI TOR
Ann LeRoyer
PRESI DENT & CEO
Gregory K. Ingram
CHAI R & CHI EF
I NVESTMENT OFFI CER
Kathryn J. Lincoln
OCTOBER 2011 • VOLUME 23, NUMBER 4
The Lincoln Institute of Land Policy is a private
operating foundation whose mission is to improve
the quality of public debate and decisions in the areas
of land policy and land-related taxation in the United
States and around the world. The Institute’s goals are
to integrate theory and practice to better shape land
policy and to provide a nonpartisan forum for discussion
of the multidisciplinary forces that infuence public policy
concerning the use, regulation, and taxation of land.
We seek to inform decision making through education,
research, demonstration projects, and the dissemina-
tion of information through publications, our Web
site, and other media. Our programs bring together
scholars, practitioners, public offcials, policy advisers,
and involved citizens in a collegial learning environ-
ment. The Lincoln Institute of Land Policy is an
equal opportunity institution.
Land Lines is published quarterly in January, April, July,
and October to report on Institute-sponsored programs.
For More Information
The Lincoln Institute Web site (www.lincolninst.edu)
provides a variety of features that make it easy for
users to quickly obtain information on land and tax
policy issues and on specifc education programs,
research, and publications. The e-commerce function
permits users to order publications and multimedia
products and to register for courses.
To receive Lincoln Institute mailings and email
announcements and to download Land Lines issues
and articles, working papers, policy focus reports, and
other materials, go to the Web site (www.lincolninst.edu)
and select “Register.” After you have registered, you
can “Log In” at any time by entering your email address
and password. To update your profle, you must log
in and then select register.
Copyright © 2011. All rights reserved.
Lincoln Institute of Land Policy
113 Brattle Street
Cambridge, MA 02138-3400 USA
Tel: 617-661-3016 or 1-800-526-3873
Fax: 617-661-7235 or 1-800-526-3944
E-mail: annleroyer@lincolninst.edu (editorial content)
help@lincolninst.edu (information services)
Web: www.lincolninst.edu
PUBLI CATI ONS AND
MULTI MEDI A PROJECT
COORDI NATOR
Robyn F. Salbo
DESI GN & PRODUCTI ON
David Gerratt
www.NonproftDesign.com
Land Lines
C O N T E N T S
PAGE 7 PAGE 14
Cypress swamp in South Carolina
© iStockphoto
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 1
Report from the President

A Global View of Infrastructure and Its Financing
Gregory K. Ingram
Infrastructure (comprising energy, telecom-
munications, transportation, water supply, and
sanitation) plays an important role in urban
land development, and it infuences city and
country productivity. Data on the amount of
infrastructure stocks at the national (but, alas,
not the metropolitan) level are available for
many developing and high-income countries
and support several results summarized here.
The amount of infrastructure stocks per
capita across countries is strongly related to per capita in-
come levels—when country incomes double, infrastructure
stocks nearly double as well. However, country infrastructure
stocks have essentially no association with a country’s level
of urbanization once country income is taken into account.
This seems surprising because cities have large amounts
of infrastructure. But they also have dense populations that
use the infrastructure intensively, so per capita urban infra-
structure stocks are similar to national levels.
The composition of infrastructure stocks also varies sys-
tematically with per capita income. Roads have the largest
share of infrastructure stocks in the lowest income coun-
tries, with water systems second and electric power systems
a close third. As country incomes increase, the infrastructure
related to electric power systems increases more rapidly
than income levels. Infrastructure for water and sewer sys-
tems increases less rapidly, and for roads the change is in
proportion to income. As a result, in high-income countries
electric power systems are the largest component of infra-
structure, followed by roads, whereas water, sanitation, and
telephone systems comprise only a modest share of their
infrastructure.
Based on recent rates of economic growth, and using
the existing relations between infrastructure and per capita
income, developing countries are likely to need to spend
about 5 percent of their GDP on infrastructure (3 percent for
expansion and 2 percent for maintenance)—currently about
$750 billion annually—to maintain existing ratios between
infrastructure and GDP. For high-income countries, total
spending would be lower, at 1.7 percent of GDP (about
evenly divided between investment and maintenance)—
currently about $700 billion annually. Countries growing
faster than average need to invest a higher share of their
GDP so that infrastructure stocks can keep
up with economic growth.
In some countries, improving the effcien-
cy of service production from existing infra-
structure is an alternative to new investment.
For example, average electricity losses
across countries range as high as 25 per-
cent, and leakage and unbilled water can
exceed 30 percent. Reducing such high
losses can forestall the need for additional
capacity. Somewhat surprisingly, performance within coun-
tries across sectors varies greatly—effcient performance
by a country in one infrastructure sector is uncorrelated with
performance in other sectors.
What sources will provide these investment funds, par-
ticularly for developing countries? Foreign assistance and
development bank fnancing of infrastructure in developing
countries currently total about $40 billion annually, and that
fgure has more than tripled since 1990 in current dollars.
Private investment in infrastructure in developing countries
has recently reached $160 billion annually and has grown
eight-fold since 1990, also in current dollars. Foreign assis-
tance is directed mainly at energy, transport, and water
and sanitation systems, with virtually no funding for tele-
communications.
In contrast, more than half of private funding goes to tele-
communications (particularly mobile telephony), followed by
energy. Telecommunications and energy draw more private
investment in developing countries because their tariff rev-
enues cover a large share of operating costs, whereas tariff
revenues and user fees cover a much smaller share of costs
for transport and water and sanitation. Private investment
in infrastructure was concentrated in Latin America and East
Asia in the 1990s but has spread more evenly across
global regions in the 2000s.
Despite the growth in international funding, large and
growing metropolitan areas in developing countries still need
to raise signifcant sums to fnance infrastructure invest-
ments. This will involve raising tariffs charged to users,
increasing taxes (particularly property taxes) on properties
whose value is enhanced by infrastructure investments, and
establishing municipal bond markets such as the one being
developed in South Africa.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 1
2 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
Exploring the Future of Large
Landscape Conservation
© iStockphoto/Denis Tangney, Jr.
James N. Levitt
I
n the tradition of previous conservation dia-
logues, a cross-sectoral, geographically diverse
group of conservationists convened to seek a
path forward—in concert with the Obama
administration’s recently released report on
America’s Great Outdoors (Council on Environmental
Quality 2011), as well as myriad initiatives at the
state and local level. Their goals were to advance
collaboration on a large landscape scale among
landowners, land managers, and citizens from the
public, private, nonprofit, and academic sectors͘
They also sought to understand and expand on
the example set by large landscape initiatives that
are achieving measurable, durable conservation
outcomes that will provide benefits for generations
to come.
Just as we can now appreciate the revival of the
White Mountains of New Hampshire from their
barren, moonscape-like conditions around 1900
to their majestic, verdant stature today, twenty-
second century Americans ought to be able to
appreciate how our foresight in working across
property, jurisdictional, and even national bound-
aries has become a key element in the nation’s
multigenerational effort to preserve essential sources
of clean water, sustainably produced forest prod-
ucts, and expansive recreational opportunities.
Speakers’ Comments
The conference speakers emphasized the impor-
tance of sustained cooperation across many orga-
nizations and sectors to achieve lasting results.
Proudly recounting how some two million acres of
Maine forestland has been conserved over the past
dozen years, Senator Susan Collins, Republican of
Maine, reported that “we have done this by build-
ing a partnership among government at all levels,
the forest products industry, environmental, forestry
and recreation groups, and landowners. Through
this partnership, we have been able to maintain or
increase productivity for wood and harvest levels,
supporting a diverse and robust forest products
industry that employs tens of thousands of work-
ers who produce paper, other wood products, and
renewable energy. At the same time, we have been
able to protect biodiversity, old growth and late
White Mountain
National Forest
near the Town of
Berlin, New
Hampshire
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 3
succession forest, and public access to recreation,
and also increase opportunities for tourism”
(Levitt and Chester 2011, 72).
Representatives Peter Welch, Democrat of
Vermont, and Rush Holt, Democrat of New Jersey,
each stressed the importance of perseverance in
such efforts. Welch remarked on the value of sus-
taining land conservation budgets during the cur-
rent round of budget negotiations. He reminded
the audience that in 1864 President Abraham
Lincoln took his attention off a monumental crisis
—the Civil War—in order to sign a bill deeding
the area of Yosemite to the state of California for
public use and recreation. If Lincoln could create
Yosemite in the midst of the Civil War, Welch
asserted, we can do our part in a time of tight
budgets and economic volatility.
Holt focused his remarks on achieving a long-
standing promise to fully fund the federal and
stateside portions of the Land and Water Conser-
vation Fund (LWCF), as well as a number of other
legislative initiatives such as the Wildlife Corridors
Conservation Act. Holt was emphatic in urging
the conservation community to respond to the
need for urgent action for our own sake, and for
the sake of future generations. He reminded the
audience of the admonition of President Lyndon
Johnson, signer of the original LWCF legislation
and the Wilderness Act in 1964: “If future genera-
tions are to remember us more with gratitude than
sorrow,” said Johnson, “we must achieve more
than just the miracles of technology. We must also
leave them a glimpse of the world as it was created,
not just as it looked when we got through with it”
(Henry and Armstrong 2004, 123).
It was evident from the discussions that leaders
from every sector stand ready to help implement
the cooperative conservation aspirations of Collins,
Welch, and Holt. Bob Bendick, director of U.S.
government relations at The Nature Conservancy,
stated that “the overall objective of AGO [America’s
Great Outdoors] should be to create and sustain
a national network of large areas of restored and
conserved land, water, and coastlines around which
Americans can build productive and healthy lives”
(Levitt and Chester 2011, 74). Accordingly, Bendick
shared with the assembled group his personal dream
that someday his young granddaughters might,
as adults, look out from the arch at the gateway
to Yellowstone National Park and note that “all
across America, 400 million people have been able
to arrange themselves and their activities across
this remarkable country in a way that reconciles
their lives with the power, grace, beauty and pro-
ductivity of the land and water that ultimately
sustain us all” (Levitt and Chester 2011, 75).
Will Shafroth, acting assistant secretary for
Fish and Wildlife and Parks of the U.S. Depart-
ment of Interior, and Harris Sherman, under-
secretary for Natural Resources and Environment
at the U.S. Department of Agriculture, shared
their frank assessments of the current situation.
Shafroth described the hard work and extensive
comments that helped shape the America’s Great
Outdoors report. While this work serves as a good
foundation for the effort ahead, Shafroth noted
that it takes considerable creativity and proactive
thinking to sustain conservation momentum in
these times of sharp budgetary constraints.
Sherman added that the whole idea of land-
scape-scale conservation implies that we need
to move from performing random acts of conser-
vation to more comprehensive and collaborative
large-scale initiatives that engage many agencies
and ownership types. Of particular importance,
he noted, will be the outcome of the debate on the
2012 Farm Bill, because its conservation provisions
will be critically important to the success of large-
scale conservation efforts.
The enthusiasm for large landscape conserva-
tion on the part of speakers from large public and
Conservation Leadership Dialogue
O
n March 1, 2011, the Lincoln Institute of Land Policy hosted
its tenth annual Conservation Leadership Dialogue with a focus
on The Future of Large Landscape Conservation in America. The
session was organized by James N. Levitt, a fellow at the Lincoln
Institute, with support from Armando Carbonell, senior fellow and
chair of the Department of Planning and Urban Form. Held in the
Members of Congress Room of the Library of Congress, across the
street from the U.S. Capitol in Washington, DC, the meeting took
place on the 100th anniversary, to the day, of President William
Howard Taft’s signing of the landmark legislation that allowed for
creation of national forests in the eastern part of the country. The
Weeks Act of 1911, named for Congressman (later Senator) John
Wingate Weeks of Massachusetts, changed the nature of coopera-
tive conservation involving citizens active in the public, private,
nonproft, academic, and research sectors in the United States.
4 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
F E A T U R E Large Landscape Conservation
ern Arizona to Northern Florida. One of the
longest operating and most important cases is in
the ACE Basin in South Carolina’s celebrated
Lowcountry. The ACE Basin, comprised of some
350,000 acres that drain into the Ashepoo, Comba-
hee, and South Edisto Rivers between Charleston
and Beaufort, is one of the largest undeveloped
estuaries along the U.S. Atlantic seaboard (figure 1).
In the late 1980s, a group of public, private,
and nonprofit organizations banded together to
form a partnership that would protect the remark-
able scenic, wildlife, and water resources in the
region. Among members of the ACE Basin Part-
nership are federal agencies such as the Fish and
Wildlife Service and the National Oceanic and
Atmospheric Administration; state agencies includ-
ing the South Carolina Department of Natural
Resources; national nonprofits including The
Nature Conservancy and Ducks Unlimited; local
nonprofits including the Coastal Conservation
League and the Lowcountry Open Land Trust;
philanthropic organizations and individuals
including the Gaylord and Dorothy Donnelley
Foundation; and private interests such as
MeadWestvaco Corporation.
Partnership members have conserved more
than 134,000 acres, covering a contiguous core in
the heart of the ACE Basin that stitches together
easements on private land, a National Wildlife
Refuge, South Carolina Wildlife Management
Areas, and a Charleston County natural and his-
torical interpretive center, among other properties.
As a large landscape initiative, the ACE Basin
truly stands out from other efforts. Mark Robertson,
the executive director of The Nature Conservancy
in South Carolina, has noted that the effort “set a
standard of how to get conservation done on a
large scale using collaboration between private
landowners, conservation groups and government
agencies.” Asked about the significance of the
progress in the ACE Basin to date, Dana Beach,
director of the Coastal Conservation League, is
emphatic: “It’s real importance is that it has given
many people for the first time hope that a place
of great importance is not inevitably going to be
developed” (Holleman 2008).
Next Steps
The leadership dialogue concluded with general
agreement that there is a great deal of work to be
done, as well as an historic opportunity to expand
nonprofit organizations was strongly reinforced
by Jim Stone, a private landowner and ranch
operator in Montana’s Blackfoot Valley. Stone
helped to start the Blackfoot Challenge, a grass-
roots organization that has yielded impressive,
measurable results over the last three decades
using a landscape-scale approach.
Stone’s colleague Jamie Williams of The
Nature Conservancy explained that the Blackfoot
Challenge has achieved remarkable success over
the years because it has taken the time to engage
so many landowners and partners in consensus-
based approaches to conservation. Initial small
successes were critical to building the foundation
of trust that led to larger successes later (Williams
2011). In the area of stream restoration alone, the
Blackfoot Challenge has helped to engage more
than 200 landowners in some 680 projects involving
42 streams and 600 stream-miles that have con-
tributed directly to an 800 percent increase in fish
populations in the 1.5 million acre valley. Stone
is emphatic in saying that, with the right people in
the right places, what has been done in the Black-
foot region could be done across the nation.
Complementing the program was a panel of
researchers and academic officials representing
universities, colleges, and research institutions that
are helping to catalyze large landscape initiatives.
Matthew McKinney of the University of Montana
moderated a dialogue with David Foster of Har-
vard Forest and Harvard University, Perry Brown
of the University of Montana, and Karl Flessa of
the University of Arizona. They explored how insti-
tutions, within their own walls and beyond, can use
their analytic and convening capacities to advance
initiatives with extensive impacts.
Perry Brown pointed out that those universities
that will play a role in real-world conservation ini-
tiatives will not be insular, but rather will cherish
their relationships with nonacademic partners
such as Indian tribes, state and federal government
agencies, and large national and small local non-
profits. David Foster reinforced that idea by describ-
ing the Harvard Forest’s outreach efforts to develop
and disseminate its recent report on Wildlands and
Woodlands New England (Foster et al. 2009).
Large Landscape Cases
There are many exemplary cases of on-the-ground
progress in large landscape conservation across the
country from Maine to Montana and from South-
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 5
F I G U R E 1
The ACE Basin and Coastal South Carolina
on initial progress in the field of large landscape
conservation. The discussion of next steps was
organized to focus on four types of initiatives.

Policy Dialogues
There is a need for ongoing policy dialogue,
both among conservationists in the public, private,
nonprofit and academic sectors and between the
conservation community and local, state and fed-
eral decision makers, regarding the very timely
opportunities to realize landscape-scale conservation
initiatives across the nation. The dialogue should
celebrate existing success stories about both cul-
tural and nature-oriented properties (both being
highly valued by the public), consider ongoing re-
gional conservation efforts, and envision new ones.
In the political sphere, these dialogues should
connect with conservation caucuses at multiple
layers of government (local, county, state, federal,
and international). In nonprofit and academic con-
texts, the dialogue should reach across disciplines
and institutional boundaries. Such intersectoral,
interdisciplinary discussions are most likely to come
up with creative solutions and novel ideas. While
the dialogues may be able to take advantage of
the socially neutral nature of universities as con-
veners, they nevertheless need to be responsive
to the practical, on-the-ground issues of vital
concern to field practitioners and landowners.

Research
Another immediate need is to build on existing
maps and inventories (e.g., the Regional Plan Asso-
ciation’s Northeast Landscape Partnership database)
to offer a more comprehensive picture of existing
public, private, and nonprofit initiatives. A more
comprehensive overview of nationwide efforts
should be of particular use to groups and networks
working to advance the practice of large landscape
conservation, including the Large Landscape
Practitioners Network, a program of the Lincoln
Institute, and the U.S. Fish and Wildlife Service’s
Landscape Conservation Cooperatives (LCCs).
Such research efforts should be more region-
ally relevant and cost-effective if they involve
cooperation among a wide assemblage of public
and private organizations. They might also serve
to augment environmental education initiatives
that already are spread thin.
Additional research is also needed to measure
the impacts, performance over time, and conserva-
tion outcomes of landscape-scale initiatives, and
to identify the key factors of success for initiatives
that are able to show significant measureable
results. Of particular importance is research that
is able to identify where, when, and how certain
efforts are able to yield measurably improved eco-
system services, such as improved water quality,
increased wildlife populations, and enhanced
sustainable production of forest products.
Networking
A number of large landscape networks have been
created recently or are now emerging, including
the Large Landscape Practitioners Network and
the LCCs mentioned above. As they evolve, the
networks are likely to nest within one another at
larger and larger geographic scales, but they will
also need to focus on sharing knowledge and build-
ing capacity at the local level to yield lasting results.
Notwithstanding the need to be grounded in local
realities, the networks have an opportunity to
reach out to international partners with lessons
to share. Within their own territories, large land-
scape conservation networks need to be linked
to diverse constituencies, including philanthropists
interested in landscape-scale conservation, univer-
sity faculty and students, a range of public agen-
cies, and, most importantly, property owners and
land managers.
Source: South Carolina Coastal Conservation League.
Hilton Head
Myrtle
Beach
Charleston
ACE Basin
Protected public
and private lands
Charleston, Berkeley,
and Dorchester Counties
Urbanized areas
6 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
F E A T U R E Large Landscape Conservation
Z A B O U T T H E A U T H O R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JAMES N. LEVITT is a fellow in the Department of Planning
and Urban Form at the Lincoln Institute of Land Policy and
director of the Program on Conservation Innovation at the Harvard
Forest, Harvard University. Contact: jlevitt@lincolninst.edu
Z R E F E R E N C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Council on Environmental Quality. 2011. America’s great
outdoors: A promise to future generations. Washington, DC:
Government Printing Offce. http://americasgreatoutdoors.
gov/report
Foster, D., D. Kittredge, B. Donahue, K. Fallon Lambert,
M. Hunter, L. Irland, B. Hall, D. Orwig, A. Ellison, E. Colburn,
A. D’Amato, and C. Cogbill. 2009. Wildlands and wood-
lands: A vision for New England. Harvard Forest Paper 32.
Petersham, MA: Harvard Forest.
Henry, Mark, and Leslie Armstrong. 2004. Mapping the
future of America’s national parks: Stewardship through
geographic information systems. Redlands, CA: ESRI.
Holleman, Joey. 2008. Ace Basin: Protected forever.
The State, Local/Metro Section, November 10. http://
www.thestate.com/2008/11/10/584599/ace-basin-
protected-forever.html#ixzz1W3yQd7KP
Levitt, James N., and Charles N. Chester. 2011. The
future of large landscape conservation in America.
Cambridge, MA: Lincoln Institute of Land Policy. http://
www.lincolninst.edu/pubs/1916_The-Future-of-Large-
Landscape-Conservation-in-America
Williams, Jamie. 2011. Scaling up conservation for
large landscapes. Land Lines 23(3): 8–13. https://www.
lincolninst.edu/pubs/dl/1923_1246_LLA_071103.pdf.
Z R E L A T E D R E S O U R C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Levitt, James N., ed. 2005. From Walden to Wall Street:
Frontiers of conservation finance. Washington, DC:
Island Press and the Lincoln Institute of Land Policy.
———. 2010. Conservation Capital in the Americas:
Exemplary Conservation Finance Initiatives. Cambridge,
MA: Lincoln Institute of Land Policy, in collaboration with
Island Press, the Ash Institute for Democratic Governance
and Innovation at the Harvard Kennedy School, and the
David Rockefeller Center for Latin American Studies at
Harvard University.
McKinney Matthew J., and Shawn Johnson. 2009.
Working across boundaries: People, nature, and regions.
Cambridge, MA: Lincoln Institute of Land Policy.
McKinney, Matthew J., Lynn Scarlett, and Daniel Kemmis.
2010. Large landscape conservation: A strategic frame-
work for policy and action. Cambridge, MA: Lincoln
Institute of Land Policy.
Demonstration and Implementation
Given what are expected to be very tight constraints on
new conservation programs at the federal, state, and local
levels over the next few years, participants focused much
of their attention on the creative use of existing budgets for
landscape-scale conservation purposes. One noted the sig-
nificant role that is already being played by the Department
of Defense to conserve (and limit development on) lands
adjacent to active military reservations. Such programs are
now being used effectively to protect habitats and working
lands from development and to limit landscape fragmenta-
tion. They also may be used in the future to address water
supply protection issues. Another participant noted the
potential significance of state and federal transportation
budgets that could be used to mitigate the disruptive
impact of new roads and highways.
Particularly enthusiastic support came from several
participants for public-private-nonprofit partnerships that
have a proven track record for protecting and enhancing
locally valued natural and cultural resources to form the
backbone for a regional green infrastructure. Examples
include Santa Fe, New Mexico; the Chattahoochee/
Apalachicola basin in Georgia, Mississippi, and Florida;
the Crown of the Continent in Montana, Alberta, and
British Columbia; and the New Jersey Highlands.
Additional opportunities for funding large landscape
conservation initiatives include state incentives for private
land protection that can be used to match selected federal
programs (e.g., the matching monies required by funds
provided by the North American Wetlands Conservation
Act); community forest programs that are now gaining
momentum around the nation; selected opportunities
for foundation Program-Related Investments (PRIs); and
emerging ecosystem service markets assisted by federal
policy and public-private partnerships, including mitiga-
tion banking and statewide markets for carbon credits,
such as those in California.
Conclusion
Notwithstanding evident federal budget constraints, myriad
opportunities are available to pursue conservation projects
that are expansive in scale, extensive in scope, able to
achieve measureable conservation outcomes, and enduring.
The conference participants themselves offered clear evi-
dence that the concept of large landscape conservation has
spread to initiatives across the continent. These individuals
and their colleagues at home and abroad are now and will
continue to be at the forefront of initiatives that protect
nature in the context of human values at a scale commen-
surate with the conservation challenges they face.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 7
Scenario Planning
Tools for Sustainable
Communities
Foothills of
the Superstition
Mountains in the
northeastern corner
of the Superstition
Vistas parcel.
Courtesy of Superstition Vistas Steering Committee
Jim Holway
S
ustaining local communities will require
mechanisms to envision and plan for the
future and to engage residents in the pro-
cess. Scenario planning is an increasingly
effective way to address these efforts, and
Western Lands and Communities, the Lincoln
Institute of Land Policy’s joint venture with the
Sonoran Institute, is working to advance the
necessary tools.
Scenario Planning to Address Uncertainty
Land use decisions and planning efforts are critical
as communities look 20 to 50 years into the future
to guide policy choices and public investments that
are sustainable across economic, social, and envi-
ronmental dimensions. As uncertainty increases
and available resources decrease, it becomes ever
more important to consider the full range of emerg-
ing conditions and to strive to ensure our ability
to respond to those changes, adopt policies, and
pursue investments that will be resilient across a
variety of potential futures.
Key areas of uncertainty include population
and demographic changes, economic trends,
climatic variability and change, resource costs
and availability, land markets, housing preferences,
housing affordability, and the fiscal health of local
governments. Simultaneous with increasing uncer-
tainty and decreasing resources, or perhaps in part
because of them, decision makers face conflicting
perspectives on desired futures and on the role of
government in providing services and infrastructure
as well as regulation and planning.
Increased polarization means that more civic
engagement and an informed and supportive pub-
lic are needed to ensure stable policies and adequate
investments in a community’s future. Scenario
planning offers a mechanism to address these
needs and issues of potential uncertainty and
conflict. Fortunately, as the scope and complexity
of planning and the demand for broader engage-
ment have increased, advances in computing
power and public access to technology are making
new and more powerful tools available.
The Lincoln Institute has a long history of
supporting the development of planning tools and
publishing the results (Hopkins and Zapata 2007;
Campoli and MacLean 2007; Brail 2008; Kwartler
and Longo 2008; Condon, Cavens, and Miller
2009). This article covers lessons learned from
8 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
the use of scenario planning tools in several
projects undertaken by Western Lands and Com-
munities (WLC), as well as mechanisms to expand
their application.
Superstition Vistas
Superstition Vistas is a 275-square-mile expanse
of vacant state-owned trust land on the urbanizing
edge of the Phoenix metropolitan area (figure 1).
State trust lands such as this site in Arizona are
key to future growth patterns because the state
owns 60 percent of the available land in the path
of development. Colorado and New Mexico to a
lesser degree face similar opportunities with their
state trust lands (Culp, Laurenzi, and Tuell 2006).
Creative thinking about the future of Superstition
Vistas began to gain momentum in 2003, and
the Lincoln Institute, through the WLC joint
venture, was an early proponent of these efforts
(Propst 2008).
Initial WLC objectives for Superstition Vistas
scenario planning included capacity building,
tool development, and opportunities to catalyze a
planning process. More specifically, we sought to:
• look at the land in a bold, holistic, and
comprehensive manner;
• advance the Arizona State Land Department’s
capacity to conduct large-scale planning and
establish an example for other state land
agencies facing urban growth opportunities;
• design a model sustainable development;
• advance scenario planning tools and illustrate
their use;
• catalyze and inform debates about modernizing
state trust land planning and development
management; and
• stimulate a larger discussion about the
Arizona Sun Corridor megaregion.
WLC, along with regional partnerships, neighbor-
ing jurisdictions, the regional electric and water
utility, two private hospital providers, and a local
mining company, formed the Superstition Vistas
(SV) Steering Committee to advance the planning
effort, secure funding, and hire a consulting team.
The consultants, working with the committee over
a three-year period, conducted extensive public
outreach and values research, assembled data on
Superstition Vistas, developed and refined a series
of alternative land use scenarios for the develop-
ment of a community of 1 million residents,
evaluated the impacts of the different scenarios,
and produced a composite scenario for the site.
The Arizona State Land Department (the
landowner) adapted the consultants’ work to pre-
pare a draft conceptual plan for Superstition Vistas
in May 2011 and submitted a proposed compre-
hensive plan amendment to Pinal County. The
county is now considering the proposed amend-
ment and its Board of Supervisors is expected
to act in late 2011.
Sustainability Lessons
The scenario analysis, utilizing enhancements
supported by WLC, identified the most important
factors in shaping development patterns and
potential conflicts among desired outcomes (figure
2). The inclusion of individual building and infra-
structure costs for the alternative scenarios facili-
tated examining the sensitivity of varying these key
factors and the cost effectiveness of four increasing
F I G U R E 1
The Superstition Vistas Site near Phoenix, Arizona
Source: Fregonese Associates.
F E A T U R E Scenario Planning Tools for Sustainable Communities
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 9
0 0.9 1.8 2.7 Miles
Rail Stop
Regional Rail
Freeway
Arizona Parkway
Major Road
Study Area
Existing Road
Creeks and Washes
Central Arizona Project
100 Year Floodplain
Proposed Network
Low
Medium
High
Density
0 5,000 10,000 15,000 Feet
levels of energy and water efficiency in each
building type.
The scenarios also examined the impact of
urban form on vehicle miles traveled (VMT).
Scenario model outputs included land use in-
dicators, energy and water use, VMT, carbon
emissions, and construction costs. This analysis
revealed the “low-hanging fruit” for sustainability
improvements. The consulting team, working with
the Steering Committee, identified a number of
lessons that illustrate the value of scenario plan-
ning tools and can be applied to other efforts to
design more sustainable and efficient urban areas
(Superstition Vistas Consulting Team 2011).
1. Create mixed-use centers to reduce travel
times, energy use, and the carbon footprint. Mixed-
use centers along public transportation routes and
close to homes and neighborhoods are one of the
most effective ways to reduce travel times, energy
use, and the resulting carbon footprint. Smaller
homes, more compact forms of urban develop-
ment, and multimodal transportation systems all
create similar benefits (figure 3). However, the
scenario modeling for Superstition Vistas demon-
strated that mixed-use centers would be substan-
tially more important than increased density in
affecting transportation choices, energy use, and
the carbon footprint.
2. Foster upfront investments and high-quality jobs
to catalyze economic success. A strong local econo-
my and a diverse balance of nearby jobs, housing,
and shops are critical for a sustainable community,
especially when high-quality jobs are provided at
the beginning of development. Significant upfront
public investment and public-private partnerships
can supply critical infrastructure and have an
enormous impact on shaping development and
increasing the value of state trust land. State owned
trust land could also provide unique opportunities
for patient capital, with enhanced trust land man-
agement authorities providing access to resources
for upfront capital investment and the ability to
recapture these investments when the land is sold
or leased later at a higher value.
F I G U R E 2
Three Possible Scenarios for the Development of Superstition Vistas
Three of the six scenarios produced by the Superstition
Vistas consultants illustrate the range of development intensity
and developed area. Scenario X is the base case with no
comprehensive planning. Scenario A has a minor density
increase over current trends in other parts of the region.
Scenario D focuses on high-density urban centers.
Source: Superstition Vistas Consulting Team (2011).
Scenario X Scenario A Scenario D
10 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
3. Provide multimodal transportation infrastructure
and regional connections to facilitate efficient growth.
Another critical step is determining how to phase
transportation improvements as the region grows
and the market can support increased services.
Phased components may include buses first, then
Bus Rapid Transit (BRT), with rights-of-way set
aside for eventual commuter or light-rail corridors.
Identifying and building multimodal transportation
corridors and infrastructure prior to sales for resi-
dential and commercial development should estab-
lish the cohesiveness of the entire area and enable
the evolution to more capital-intensive transpor-
tation infrastructure as the community matures.
4. Design efficient buildings that save water and
energy resources and reduce the community’s carbon
footprint. Incorporating construction costs and
return on investment (ROI) data in resource plan-
ning allows for financial feasibility and cost-benefit
calculations. The consulting team modeled four
levels of water and energy use (baseline, good,
better, best) for each scenario and building type.
Results demonstrated that investments in energy
efficiency would be better spent on residential
than commercial and industrial buildings. An addi-
tional finding showed that building centralized
renewable power generation may be a better
investment than extreme conservation.
5. Offer housing choices that meet the needs of
a diverse population. Ensuring a viable community
means meeting the needs of all potential residents
with a broad variety of development types and
prices that local workers can afford and that allow
for adjustments under future market conditions.
6. Incorporate flexibility to respond to changing
circumstances. A challenge for large-scale master
plans that will take shape in multiple phases over
50 years or more is how to plan so the develop-
ment itself can evolve and even redevelop over
time. Plan implementation needs to include
mechanisms to limit future NIMBY (not in my
back yard) problems for necessary infill and
redevelopment projects.
Procedural Lessons
The visioning process for Superstition Vistas in-
volved planning a completely new city or region
of communities in a vacant area with a single pub-
lic landowner and no existing population. Given
the recent economic downturn, as well as the lim-
ited capacity of the state agency to bring land to
market, development of this area will likely be
postponed for a number of years. Despite these
particular conditions, procedural lessons learned
in the project to date are relevant to other long-
term and large-scale efforts, and to the expanded
use of scenario planning for community decision
making in general.
Agreed-upon procedures and planning process-
es become increasingly important as the planning
and development time period grows and the num-
ber of stakeholders increases. Significant changes
in participants, perspectives, and external factors,
such as the recent collapse of the development
economy, should be expected in any long-term,
multiparty project. Such challenges need to be
considered and incorporated into project tasks.
1. Design for change. Long-term projects need
to accommodate changes in stakeholders, decision
makers, and even political perspectives during the
course of planning and implementation. Projects
would benefit enormously from anticipating such
changes, agreeing on mechanisms to transfer
knowledge to new participants, establishing certain
criteria and decisions that new stakeholders would
be expected to follow, understanding how to deal
with political or market conditions that will
F E A T U R E Scenario Planning Tools for Sustainable Communities
Source: Fregonese Associates.
F I G U R E 3
Carbon Footprint of Transportation and Building Emissions
T
o
n
s

o
f

C
O
2

E
m
i
s
s
i
o
n
s

p
e
r

Y
e
a
r

p
e
r

C
a
p
i
t
a
Baseline
Good
Better
Best
2.59
1.50
0.95
0.58
5.47
3.84
2.65
1.04
8.06
5.34
3.61
1.63
Transportation
Building
Total
Scenario X
Scenario A
Scenario D
2.38
1.38
0.87
0.54
6.28
4.45
3.13
1.32
8.66
5.83
4.00
1.85
1.39
0.80
0.51
0.31
3.82
2,71
1.98
0.93
5.21
3.51
2.49
1.25
9
8
7
6
5
4
3
2
1
0
Transportation fuel
and building energy
use (baseline, with
good, better, and
best improvements)
impact carbon
emissions differ-
ently in three of six
Superstition Vistas
scenarios.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 11
change, and building resiliency for such factors
into the alternative scenarios themselves.
2. Consider governance. This is an issue for plan-
ning and implementation efforts and for the political
decision-making structure of a new community.
In building a new city it is important to consider
how to create a governance system capable of
implementing a consistent, comprehensive vision
for a community that does not yet exist.
3. Incorporate new community designs into local
and regional comprehensive plans. It is also critical to
consider how a project at the scale of Superstition
Vistas, with up to 1 million residents and a build-
out plan of 50 years or more, can be incorporated
into the framework of a typical county comprehen-
sive plan. Scenarios and visions must reflect ideas
and plans that local jurisdictions will be politically
willing and administratively able to incorporate
into their planning processes.
4. Phase development. Communities need to
establish mechanisms that allow the adoption of
a long-term buildout vision and then incorporate
a series of flexible and adaptable phased plans
to implement that vision in appropriate stages.
5. Plan for market changes. Market conditions,
housing preferences, and employment opportu-
nities will evolve, and large-scale projects with
creative and compelling visions may even create
their own demand. No one knows what future
markets may offer, so consideration of alternative
markets and adaptable community designs are
critical. Projected housing mixes and estimates of
development absorption need to be flexible and
not based only on current preferences and trends.
6. Connect to common values. Demonstrating how
development proposals connect to common visions
and values that are shared and stable over time is
also important. For Superstition Vistas, values such
as an opportunity for healthy lifestyles and choices
for residents across the socioeconomic spectrum
were found to be broadly accepted. Planners also
need to recognize values that are more controver-
sial or may be transient and likely to change.
Challenges and Opportunities
The WLC experience in planning for Superstition
Vistas has been successful in several respects. The
community came together through the Steering
Committee to develop a consensus vision that rep-
resented multijurisdictional cooperation around
sustainable “smart” growth. Neighboring commu-
nities, at the request of the state land commissioner,
deferred any consideration of annexation. In
addition, the Arizona State Land Department
developed a plan for a geographic scale, time
horizon, and level of comprehensiveness well
beyond anything attempted previously. However,
the proposed comprehensive plan amendment for
Superstition Vistas is at best a first step toward a
vision for a community of up to 1 million people.
The Arizona State Land Department has been
unable, at least so far, to push the envelope very
far on new and more creative ways to conceptual-
ize large-scale developments that could enhance
the economic value of state trust lands and im-
prove regional urban form. The recent collapse of
land and housing markets throughout the country
has also impacted this project and local perceptions
of future growth potential. Since the overall effort
to conceptualize and implement development
plans for Superstition Vistas is just beginning, ini-
tial on-the-ground development is not expected for
at least a decade. There will be multiple opportu-
nities to build on these planning efforts to bring
bolder and more comprehensive visions forward
as the real estate economy recovers and the land
becomes ripe for development.
Scenario planning and effective visualizations
become both more important and more challeng-
ing to achieve when conducting larger and longer-
term visioning exercises. Visualizations that pro-
vide compelling depictions of activity centers and
higher-density, mixed-use neighborhoods can help
to gain public acceptance. Effective mechanisms
are also needed to convey to current participants
that the planning process is imagining community
characteristics and housing and lifestyle prefer-
ences for their grandchildren or great-grand-
children many years in the future.
As noted earlier, upfront investments in trans-
portation, economic development, education, and
utility services can significantly shape a communi-
ty, serve as a catalyst for higher-level employment,
and earn high returns. To achieve this potential,
mechanisms are needed to facilitate these invest-
ments, whether on private lands or state trust
lands. Continued work on the contributory value
of land conservation, infrastructure investment,
planning, and ecosystem services, as well as the
integration of this information into scenario plan-
ning, would greatly aid efforts to address uncer-
tainty and advance community sustainability.
12 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
Source: Fregonese Associates.
Other Projects and Lessons Learned
WLC conducted three additional demonstration
projects to further enhance scenario planning
tools and apply them in different situations.
Gallatin County, Montana
Sonoran Institute staff worked with Montana
State University (MSU) to engage local stake-
holders in a workshop where each of four teams
produced scenarios for concentrating projected
growth within the currently developed “triangle”
region of Bozeman, Belgrade, and Four Corners.
This effort successfully integrated Envision Tomor-
row scenario planning with housing unit projections
from the Sonoran Institute’s Growth Model and
demonstrated the value of ROI tools as a reality
check on proposed land use and building types.
The project also demonstrated the value of
scenario planning to local experts.
Lessons learned include recognizing that (1) for
many participants working with paper maps was
more intuitive that the touch screen technology we
had employed; (2) additional information on land
characteristics, such as soil productivity and habitat
values, should be used in preparing growth scen-
arios; and (3) more effective techniques are needed
to visualize the density and design of different land
use types, as well as to incorporate political and
market realities that are not typically captured
with scenario planning tools.
Products from this Montana project will include
the creation of a library of regionally appropriate
building types for use with ROI and scenario mod-
eling and a report examining the costs and benefits,
including sustainability impacts, of directing future
growth to the triangle area of Gallatin Valley.
With WLC support MSU has been able to incor-
porate the use of scenario planning tools in its
graduate program.
Garfield County, Colorado
Sonoran Institute’s Western Colorado Legacy
Area office, with support from the Lincoln Institute,
U.S. Environmental Protection Agency, and other
local contributors, utilized the Envision Tomorrow
tool in a new way to advance implementation of
previously adopted plans calling for mixed-use
infill and redevelopment in target growth areas.
This project focused on stakeholder education
regarding the mechanisms necessary to implement
recently adopted comprehensive plans calling for
F I G U R E 4
Alternative Visions for Downtown Rifle, Colorado
F E A T U R E Scenario Planning Tools for Sustainable Communities
Figure 4a
Figure 4b
Figure 4c
Figure 4a shows the current condition of a site in downtown Rifle,
Colorado. Figures 4b and 4c are computer-generated visualizations
of redevelopment options for that site.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 13
Z A B O U T T H E A U T H O R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JIM HOLWAY directs Western Lands and Communities, the Lincoln Institute’s joint
venture with the Sonoran Institute, based in Phoenix, Arizona. He was previously
assistant director of the Arizona Department of Water Resources and a professor of
practice at Arizona State University. Contact: JHolway@ sonoraninstitute.org
Z R E F E R E N C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propst, Luther. 2008. A model for sustainable development in Arizona’s
Sun Corridor. Land Lines 20(3).
Superstition Vistas Consulting Team. 2011. Superstition Vistas:
Final report and strategic actions. www.superstition-vistas.org
Z L I N C O L N I N S T I T U T E P U B L I C A T I O N S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brail, Richard K. 2008. Planning support systems for cities and regions.
Campoli, Julie, and Alex S. MacLean. 2007. Visualizing density.
Condon, Patrick M., Duncan Cavens, and Nicole Miller. 2009. Urban
planning tools for climate change mitigation.
Culp, Peter W., Andy Laurenzi, and Cynthia C. Tuell. 2006. State trust
lands in the West: Fiduciary duty in a changing landscape.
Hopkins, Lewis D., and Marisa A. Zapata. 2007. Engaging the future:
Forecasts, scenarios, plans, and projects.
Kwartler, Michael, and Gianni Longo. 2008. Visioning and visualization:
People, pixels, and plans.
town-centered development, rather than on
scenario generation for a comprehensive plan.
Examination of policy and market feasibility
for redevelopment in downtown Rifle, Colorado,
was one of three separate efforts undertaken. The
City of Rifle project successfully utilized an ROI
tool to identify financial and regulatory factors that
could impact revitalization efforts and engaged the
key parties necessary for implementation, includ-
ing property owners, developers, realtors, planning
commissioners, local officials, state transportation
representatives, and local staff.
Among the lessons learned from this project
was the importance of grounding bold visions
with market reality. For example, previous plan-
ning efforts in Rifle had focused on six-to-eight-
story mixed-use buildings, but in the current
market even three-to-four-story projects are not
considered feasible (figure 4c). Most attention now
is given to two-story mixed-use projects and town-
homes. Visualizations for an underutilized parcel
in the center of town illustrated the type of one-
story option that may be most feasible for initial
commercial development (figure 4b). Constraints
related to parking requirements and high mini-
mum lot coverage requirements were also identi-
fied as limits on investment. In addition to pin-
pointing changes in Rifle’s building code, these
findings spurred discussion about the role of pub-
lic-private partnerships in catalyzing downtown
development.
Morongo Basin, California
This area of high open space and wildlife habitat
values between Joshua Tree National Park and
the Marine Corps Air Ground Combat Center
in Southern California may be impacted by spill-
over from regional growth. This project with the
Morongo Basin Open Space Group involves an
innovative effort to link results from the ongoing
conservation priority-setting efforts with both a
GIS tool to analyze and predict how land use
patterns impact wildlife habitat and the scenario
planning capability of Envision Tomorrow.
We are evaluating the environmental impacts
of the current and potential alternative develop-
ment patterns and location-specific planning
and land use options. The tools being developed
for this effort will be useful to land trusts through-
out the country that are interested in engaging
partners on local and regional planning issues
and incorporating larger landscape conservation
and wildlife habitat goals into their projects.
Open Source Planning Tools
Western Lands and Communities has recently
been focusing on efforts to develop open source
planning tools as a mechanism to increase the use
of scenario planning. Key factors that hinder their
use include: (1) the cost and complexity of the
tools themselves; (2) the cost and availability of
data; (3) a lack of standardization, making integra-
tion of tools and data difficult; and (4) proprietary
tools that may be difficult to adapt to local con-
ditions and may impede innovation.
Proponents of open source modeling tools
believe open and standardized coding will facilitate
increased transparency and interoperability be-
tween models, ultimately resulting in faster inno-
vation and greater utilization. As a result of our
work with Envision Tomorrow on the Superstition
Vistas project, WLC and other members of an
open source planning tools group are continuing
to advance scenario planning tools and pursue the
promise of open source tools that can foster sus-
tainable communities in many more locations.
14 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
David Michael Vetter and Marcia Vetter
B
razil’s chronically low level of public
sector investment has resulted in
serious infrastructure deficits that
are often cited as an impediment to
its economic development. Brazil’s
municipalities face an urgent need to invest in
infrastructure, but lack the “fiscal space to do so
due to the fiscal constraints in the country’s macro-
economic program. Backlog in municipal infra-
structure is estimated at about $40 billion over
the next 10 years” (World Bank 2006, xix). Heller
(2005, 1) defines fiscal space as “room in a govern-
ment’s budget that allows it to provide resources
for a desired purpose without jeopardizing the
sustainability of its financial position or the
stability of the economy.”
Although public capital formation among
countries varies due to their respective public-
private divisions of expenditure responsibilities,
Brazil’s average gross formation of public capital
(GKP) as a percentage of gross domestic product
(GDP) was only 1.8 percent in 2006–2007, ranking
second from the bottom for 28 emerging countries
and last among the BRIC countries: 20.8 percent
for China, 7.3 percent for India, and 4.5 percent
for Russia (Afonso and Junqueira 2009b). The rise
of private financing for infrastructure in Brazil in
the 1990s was not enough to compensate for the
public decline (World Bank 2007). Brazil needs to
increase infrastructure investment in order to fur-
ther improve its economic and social performance.
This article explores how Brazil can provide
funding for much-needed infrastructure invest-
ment while controlling the consolidated national
and subnational public sector deficits and debt
as required to maintain price stability and an
investment grade sovereign rating.
The Potential of Land-Based Instruments
Traditionally Brazil’s municipalities have been
considered more often a potential source of fiscal
problems than of fiscal space. To maintain finan-
cial sustainability and economic stability, Brazil has
controlled the consolidated public sector debt of
states and municipalities through a complex web
of restrictions on borrowing by them or lending to
them, including the Fiscal Responsibility Law of
2000. Within this framework of tight fiscal controls
and fiscal discipline, could Brazil’s municipalities
generate fiscal space for investment and provision
of social needs by increased use of land-based
financing? One indication of the potential for
creating such fiscal space is that municipal invest-
ments already are quite substantial, constituting
© Gislene Pereira
Land-Based Financing
for Brazil’s Municipalities
Infrastructure
investments
are improving
roadways in
Curitiba, Brazil.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 15
40.3 percent of Brazil’s total public sector invest-
ment in 2008 (Afonso and Junqueira 2009a).
Municipalities could further increase their fiscal
space for investment by (1) increasing expenditure
efficiency; (2) increasing revenue through more
effective administration of the real estate property
and transfer taxes and fees, as well as other own-
source revenues; and (3) using other land-based
instruments that would not involve municipal
borrowing, such as the sale of development rights
and underutilized land. In other words, land-based
financing could create fiscal space for investment
without increasing municipal deficits or debt.
According to Peterson (2009), land-based
financing is not a practical or desirable way to pay
for the entire capital budget, but it has significant
advantages as part of the mix of capital financing,
especially when the revenues accrue before the
investment is made. In this case they add flexibility
to financing decisions and reduce the need for
long-term credit, which is often difficult to obtain
in developing countries.
In Brazil, these land-based instruments include:
• real estate property and transfer taxes;
• impact fees for new developments;
• betterment levies;
• sale of development rights;
• sale of underused public land and buildings;
• land readjustment (e.g., consórios urbanos); and
• urban concessions (concessão urbana), a new
instrument being used to revitalize the Nova
Luz neighborhood in São Paulo.
None of these instruments involve public sector
borrowing and therefore would not increase the
public sector debt or be covered by the restrictions
on borrowing by or lending to municipalities.
Brazil’s Federal Constitution of 1988 grants
municipalities the power to define and use such
land-based instruments. The guidelines were sub-
sequently regulated by Federal Law No. 10,257
of 2001, known as Urban Development Act or
City Statute (Estatuto da Cidade).
Incentives to Generate Fiscal Space
The municipal development strategy recommended
by the World Bank (2006) gives priority to estab-
lishing a sustainable market-based subnational cred-
it system and providing assistance to municipalities
to become creditworthy within a framework of
continued fiscal discipline. A first step in develop-
ing such a strategy could be to change the way the
national credit allowances for different municipal
programs are distributed among municipalities
by the federal government.
To lay the foundation for modern credit markets,
a modified national credit program could provide
incentives to create fiscal space by imposing per-
formance conditions. For instance, credit would
be granted to those municipalities that
• are most creditworthy, as this would provide
incentives to further improve or at least main-
tain their financial performance;
• prepare efficient and equitable investment
plans and capital budgets; and
• leverage borrowing by using the land-based in-
struments so the total fiscal space created per R$
(Brazilian currency=real) of borrowing is high.
To assess the feasibility of such a strategy, we
ask: How many Brazilian municipalities would be
judged creditworthy by national and international
creditworthiness standards? How fully are they
using their real estate taxes and fees? What are
their investment levels? Have they passed the legis-
lation necessary to fully utilize the land-based in-
struments that help create and capture real estate
value? In other words, what is the potential of
these municipalities to create fiscal space to finance
infrastructure and other needed investments?
Methodology and Analysis
To address these questions, we generated a muni-
cipal database that includes the indicators typically
used by credit rating agencies and other financial
institutions to assess municipal creditworthiness.
This database enables us to rank municipalities by
their performance on any of the indicators and to
analyze relationships among variables using corre-
lation analysis or other methods. For more details
on the methodology, data, indicators, and analysis,
see Vetter and Vetter (2011).
Table 1 shows the indicators and the methods
used to generate them, including our composite
indicators (OECD 2008). The municipalities
selected for study are those with at least 50,000
inhabitants in 2008, because cities of that size
are more likely to have the will and administrative
capacity to increase their fiscal effort. In 2008,
the 584 municipalities with populations of 50,000
or more held over 65 percent of Brazil’s total
population. We excluded 66 municipalities due
16 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
F E A T U R E Land-Based Financing for Brazil’s Municipalities
to incomplete financial data, leaving a final sample
of 518 municipalities. The first part of the analysis
deals with this sample and the second part focuses
on 130 municipalities that ranked in the top quar-
tile on the Creditworthiness Indicator.
Municipal Financial Performance
Indicators
We developed two composite indicators of muni-
cipal financial performance using data from the
National Secretary of the Treasury (Secretaria do
Tesouro Nacional, STN 2008): Financial Perfor-
mance Score and Financial Performance Rank.
These indicators are used to judge municipal
capacity to generate fiscal surpluses and service
additional debt, but do not, of course, show how
effectively or efficiently the resources are employed.
Most of the 518 municipalities in the sample
(68 percent) meet all five financial performance
criteria. The best overall performance is shown
in the Total Debt Service/Net Current Revenue
(NCR) Indicator, where 99.8 percent of munici-
palities spent less than 11.5 percent of NCR on
debt service. The worst overall performance was
on Personnel Expenditures/NCR, where only 83.4
percent of the municipalities met the criteria.
Among the municipalities meeting all five criteria,
some are much more creditworthy than others.
TA B L E 1
Financial Performance and Other Indicators Used in Analyzing Brazil’s Municipalities
Type
Normalization
of Criteria Basic Indicators Used
Indicator/
Aggregation
Creditworthiness
Financial Performance Score Benchmark Meets 5 different fnancial performance indicators
(if yes=1, if no= 0)
Sum of 5 binary
variables
Financial Performance Rank Ranking Ranks on 5 fnancial performance indicators Average ranking
Economic Potential Ranking Ranks on 4 economic indicators: Total size of municipal
GDP 2007; absolute change in GDP 2002–2007; relative
change of GDP 2002–2007; and GDP per capita 2007
Average ranking
on the 4
indicators
Creditworthiness Ranking Defned in the text using the fnancial performance and
economic potential indicators
Ranking
Financial Performance Indicators
Total Debt Service/Net Current
Revenue (NCR)
< 11.5% Estimated with fnancial data from STN data None
Total Debt Stock/NCR < 75.0% Same as above None
Operating Surplus/NCR > 10.0% Same as above None
Total Debt Service/ Operating Surplus < 30.0% Same as above None
Personnel Expenditures/NCR < 54.0% Same as above None
Other Indicators
Investment Ranking Municipal investment in plant and equipment as a
percentage of municipal GDP
Ranking
Total Real Estate Taxes and Fees
(TRE)
Ranking Total revenue from the urban real estate property and
transfer taxes (IPTU and ITBI) and betterment fees.
Ranking
Passage of Land-Based legislation Benchmark Passage of 8 laws needed to use the land- based
instruments of the Statute of the City (if yes=1, if no= 0)
Sum of 8 binary
variables
Municipal Human Development Index
(IFDM)
Ranking Annual indicator of municipal human development (IFDM)
that is similar to the UNDP’s Human Development Index
(HDI). IFDM varies between 0 and 1.0, in which 1.0 would
be the highest development level.
Based on em-
ployment, income,
education, and
health indicators
Population below the Poverty Line Percentage % of populations in households with income per capita
of one quarter of a minimum salary or less. This is the
defnition of extreme poverty (indigente).
% of population
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 17
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
% of Net Current Revenue (NCR)
Total Debt
Service/NCR
Total Debt
Stock/NCR
Operating
Surplus/NCR
Total Debt
Service/
Operating
Surplus
Personnel
Expenditures/
NCR
2nd quartile
1st quartile
Total sample
2.1%
47.0%
14.6%
21.5%
33.8%
43.0%
9.3%
24.5%
14.8%
45.7%
13.2%
23.3%
22.3%
2.9%
2.7%
To generate the Financial Performance Rank,
we ranked them on the average of all five criteria,
with the most favorable performance receiving a
rank of 518 and the least favorable a rank of 1.
Creditworthiness
We developed the municipal Creditworthiness
Indicator in two steps. First, we selected munici-
palities in the top three quartiles on the Economic
Potential Indicator with a Financial Performance
Score of five (i.e., meet all five financial criteria).
Then we calculated the average rank of the two
scores. Figure 1 shows that even the municipalities
ranking in the second quartile on creditworthiness
demonstrate relatively good performance on all
five financial performance indicators by national
and international standards.
Municipal Human Development Index
and Creditworthiness
Figure 2 shows a low correlation between the
Creditworthiness Indicator and Municipal Human
Development Index (IFDM). In fact, this scatter-
gram shows that many municipalities ranking in
the bottom half in terms of the human develop-
ment index rank in the top half in terms of their
creditworthiness. The wide dispersion of observa-
tions shows that there is a great deal of diversity
(i.e., low correlation and high variance) among
Brazil’s municipalities with regard to creditworthi-
ness and human development. As the Creditwor-
thiness Indicator is not as highly correlated with
the IFDM as might be expected, a program initial-
ly focusing on the most creditworthy municipalities
would not be as regressive as it might seem.
Analysis of Top Ranking Municipalities
To develop a national program that would pro-
vide incentives in the form of access to credit for
creation of fiscal space, we wanted to identify
municipalities ranking in the top quartile on the
Creditworthiness Indicator. Such a program would
stimulate investment in municipalities with a rela-
tively high potential for future economic develop-
ment and superior financial performance, thereby
rewarding responsible financial performance.
Brazil’s fiscal federal system already includes many
automatic transfers to municipalities that are based
on population and other criteria rather than on
financial performance or creditworthiness.
The total 2008 population and 2007 GDP of
the 130 municipalities in the top quartile were
32.3 million and US$346 billion, respectively.
These municipalities held 27.7 percent of the total
F I G U R E 1
Financial Performance Indicators for Municipalities Ranked
in the Top Two Quartiles on Creditworthiness
18 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
250
300
350
400
450
500
0.40 0.50 0.60 0.70 0.80 0.90 1.00
Socio-economic Index (IFDM)
Median IFDM = 0.76
Rank: Bottom Half IFDM Rank: Top Half IFDM
R
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n
k
:


C
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e
d
i
t
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o
r
t
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s
s

F E A T U R E Land-Based Financing for Brazil’s Municipalities
population in the full sample, 31.7 percent of its
GDP, and 21.9 percent of the total population
living below the poverty line.

Municipal Investment and Performance
on the Real Estate Taxes and Fees
For the top ranked municipalities, median invest-
ment as a percentage of municipal GDP is 1.03
percent and is not correlated with the Creditwor-
thiness Indicator (Spearman correlation = -0.01).
Bringing all municipalities now below the median
up to 1 percent of municipal GDP would increase
total annual municipal investment by US$750 mil-
lion for this top quartile, that is about a 20 percent
increase over this median investment level.
Bahl and Martinez-Vazquez (2007) estimated
the average real estate property tax (TRE)/GDP
ratio for developing countries in their sample to be
0.6 percent in 2000. Half of the municipalities in
this top creditworthiness quartile had TRE/GDP
median ratios below the observed low 0.34 percent
level indicating how much additional fiscal space
might be available.
Our simulation shows that raising TRE/GDP
to 0.6 percent for all municipalities in the top quar-
tile would increase total annual municipal revenue
by over US$700 million. Bringing all the munici-
palities below 0.6 percent up to this level would
involve an average annual per capita TRE increase
of only about US$24. Obviously, municipalities
with TRE revenues above this 0.6 percent level
could also increase their fiscal effort. Based on
these results, one could argue that there is room
for more fiscal effort with respect to real estate tax-
es and fees by municipalities in this top quartile.
Betterment levies account for only 0.4 percent
of TRE for all of the municipalities in the sample.
However, the top 20 municipalities ranked by total
revenue from betterment levies had collected be-
tween US$473,000 and US$2.6 million in 2008,
with an average collection of US$928,000. For
these 20 municipalities, these levies represented on
average more than 10 percent of total municipal
investment, but the average levy as a percent of
GDP was only 0.18 percent. It would be interest-
ing to analyze why these few municipalities were
willing and able to use betterment levies so much
more effectively than most others in the sample.
Enactment of Land-Based Legislation
According to the annual survey of municipalities
by the Brazilian Institute of Geography and Statis-
tics (IBGE 2009), only 32 of the 130 municipalities
(24.6 percent) passed all eight laws needed to fully
utilize the land-based fiscal instruments permitted
by the Statute of the City, and 43 municipalities
(33 percent) had passed four or fewer laws. Since
passage of such legislation could create additional
fiscal space for municipal investment without in-
creasing municipal debt or deficits, there seems to be
much room for increased use of these instruments.
Sandroni (2011) estimated the total revenue
for the City of São Paulo from the single law that
allows charges for the sale of additional develop-
ment rights (Outoga Onerosa do Direito de Construir–
OODC) to be over US$300 million for the 2006–
2010 period. This total excludes the more than
US$1 billion from the municipality’s 13 urban de-
velopment operations financed by selling develop-
ment rights (e.g., Faria Lima and Água Espraiada).
Summary and Policy Implications
This analysis of municipalities ranking in the top
quartile by the Creditworthiness Indicator shows
that they often invest at low levels, demonstrate
low fiscal effort on real estate taxes and fees, and
have not passed all of the legislation necessary to
use the land-based instruments. Simulations also
indicate that relatively small increases in fiscal
effort on real estate taxes and fees could generate
F I G U R E 2
Relationship Between the Creditworthiness Rank and
Municipal Human Development Indicator (IFDM) for
Municipalities Ranking in the Top Half on Creditworthiness
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 19
significant fiscal space for municipal investment
or other priorities.
Additional real estate value will be created in
future years as Brazil’s municipalities grow and
provide new infrastructure. For example, the devel-
opment plan for the new beltway in Rio de Janeiro
includes major strategic public and private sector
investments of more than US$30 billion, including
major petrochemical (COMPERJ) and steel facili-
ties already being implemented. Such projects are
likely to generate value that could be captured in
part by the land-based instruments to help finance
infrastructure, and they could provide subsidies
for housing lower-income families.
Based on these findings, we argue that a
national program allocating at least part of the
annual allotment of municipal credit based on
performance criteria could provide incentives for
increased generation of municipal fiscal space
while maintaining fiscal discipline.
Such a program could be open to all municipal-
ities that meet the creditworthiness criteria and
have an acceptable capital budget (i.e., attain the
benchmarks discussed above). To help all munici-
palities become eligible, technical assistance could
be available within the program, including help to
improve collection of real estate taxes and fees
(e.g., better cadastres, collection systems, and im-
proved valuations), prepare and execute effective
capital budgets, and put the land-based instru-
ments into operation.
This research demonstrates the utility of a data-
base combining municipal financial and socio-
economic indicators to improve municipal financial
performance. Periodic publication of such a data-
base could complement the information that STN
currently provides and facilitate future research
and policy analysis. Continuing the estimates of
residential capital at the municipal level for this
database using the hedonic price method with the
2010 Census data would be most useful.
In summary, a national program could provide
incentives for municipalities to increase their fiscal
space for investment and other priorities. The pro-
gram also could encourage municipalities to recog-
nize that effectively planning interventions (public
works and land use regulations) can significantly
increase land values that then can be captured in
part by using the available land-base instruments.
In short, such a program could help finance a
brighter future for Brazil’s municipalities.
Z A B O U T T H E A U T H O R S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DAVID MICHAEL VETTER has worked for nearly four decades on urban finance
and economics issues in public and private sectors in Latin America. Contact:
vetterdav@aol.com
MARCIA VETTER has worked as a consultant with multilateral and multinational
organizations and financial corporations in the United States and Brazil. Contact:
marcivt@aol.com
Z R E F E R E N C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Afonso, J. R., and G. Junqueira. 2009a. Investimento público no Brasil é
mais municipal que federal. Revista de Administração Municipal 55(272):
18–25. Rio de Janeiro: IBAM. http://www.joserobertoafonso.com.br/
attachments/article/1216/IBAM.pdf
———. 2009b. A baixa taxa de investimento público Brasileira compara-
da a dos demais paises em desenvolvimento. Unpublished technical note.
http:// www.joserobertoafonso.com.br/attachments/article/1153/FMI.pdf
Bahl, R., and J. Martinez-Vazquez. 2007. The property tax in developing
countries: Current practice and prospects. Working Paper. Cambridge, MA:
Lincoln Institute of Land Policy.
Heller, P. 2005. Back to basics—Fiscal space: What it is and how to get it.
Finance and Development 42(2). http://www.imf.org/external/pubs/ft/
fandd/2005/06/basics.htm
IBGE (Brazilian Institute of Geography and Statistics). 2009. Perfl dos
muncipios brasileiros, 2008. http://www.ibge.gov.br/home/estatistica/
economia/perfilmunic/2008/munic2008.pdf
OECD (Organisation for Economic Co-operation and Development). 2008.
Handbook on constructing composite indicators: Methodology and user
guide. Paris: OECD. http://www.oecd.org/dataoecd/37/42/42495745.pdf
Peterson, G. E. 2009. Unlocking land values to finance urban infra-
structure. Washington, DC: World Bank and Public-Private Infrastructure
Advisory Facility (PPIAF). http://www.ppiaf.org/ppiaf/sites/ppiaf.org/files/
publication/Trends%20Policy%20Options-7-Unlocking%20Land%20
Values%20-GPeterson.pdf
Sandroni, P. H. 2011. Recent experience with land value capture in
São Paulo, Brazil. Land Lines 23(3): 14–19.
Secretaria do Tesouro Nacional (STN). 2008. Perfl e evolução das
fnanças municipais: 1998–2007. Brasília: STN. http://www.tesouro.
fazenda.gov.br/estados_municipios/index.asp
Vetter, D. M., and M. Vetter. 2011. Could land-based fnancing help create
fscal space for investment by Brazil’s municipalities? Working Paper.
Cambridge, MA: Lincoln Institute of Land Policy.
World Bank. 2006. Brazil: Inputs for a strategy for cities: A contribution with
a focus on cities and municipalities. Volume I: Main Report No. 35749-BR.
Washington, DC: World Bank. http://www-wds.worldbank.org/external/
default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&
menuPK=64187510&searchMenuPK=64187283&theSitePK=523679&
entityID=000090341_20061205145849&searchMenuPK=64187283&
theSitePK=523679
———. 2007. Brazil: How to revitalize infrastructure investments in
Brazil: Public policies for better private participation. Report No. 36624-BR.
Washington, DC: World Bank, Finance, Private Sector, and Infrastructure
Management Unit, Latin America and the Caribbean Region. http://www.
planejamento.gov.br/secretarias/upload/Arquivos/seain/Investimentos_
InfraEstrutura_ParteI.pdf
20 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
7KH/RQJ5RDGWR6WDWH
)LVFDO5HFRYHU\
Donald Boyd
7
he recent recession has been recog-
nized as the worst in memory, and
its effects are still being felt. Less
well understood is the fact that this
recession has been far worse for state
governments than the drop in gross domestic prod-
uct (GDP) would suggest. While state government
finances have stopped falling off a cliff, they are
closer to the bottom of that cliff than the top. Tax
receipts have not returned to their pre-recession
levels, and new revenue demands may overwhelm
any interim improvements in collections. Even if
states can avoid these challenges, it will be a long,
slow road to fiscal recovery, with several large
risks along the way.
State and local governments play a major role
in the economy and in our daily lives. They finance
more than 90 percent of K-12 education and
deliver virtually all of it. Public colleges and univer-
sities educate three-quarters of students enrolled
in degree-granting institutions. State and local
governments oversee, design, and build more than
90 percent of the nation’s public infrastructure.
They finance much of the nation’s social safety
net and implement much of it as well. In fact,
state and local governments spend more on direct
implementation of domestic policy than does
the federal government.
The services financed and delivered by state
and local governments tend to have stable and
generally rising demand. When a recession hits,
there is no reduction in the numbers of children
in school or elderly people in nursing homes—two
of the most important spending areas for state and
local governments—or in the numbers of fires or
crimes. For programs such as Medicaid and higher
education, for example, demand for the kinds of
services that state and local governments provide
typically rises during recessions. Unless and until
states can fix their revenue structures or develop
adequate reserves, public policy will continue to
gyrate with every turn in the economy.
Decline in State Tax Collections
The Great Recession that started in December
2007 was the deepest and longest recession since
the Great Depression of the 1930s. The unem-
ployment rate rose to 10.1 percent and has re-
mained stubbornly high, falling only to 9.1 per-
cent after two years of recovery. State tax collections
plummeted, falling for five consecutive quarters
beginning in the fourth quarter of 2008 and con-
tinuing through 2009. Tax revenue fell by a dizzy-
ing 16.8 percent in the second quarter of 2009,
and over the next several years it declined further
and more sharply than it had in any other reces-
sion since World War II (figure 1).
The recent drop in GDP has been significant
in comparison to past recessions, but the declines
in taxable consumption and personal income,
two components that typically constitute the tax
bases of state and local government, have been
far worse. Taxable consumption fell by about 11
percent, while GDP fell by about 5 percent. Tax-
able components of personal income also fell
much more sharply than the overall economy and
still languish more than 5 percent below the pre-
recession peak, reflecting the jobless recovery.
Even though this has been the worst post-war
recession by traditional economic measures, these
measures do not tell the whole story. Capital gains,
an important component of state tax bases, are
not included in personal income as measured in
the nation’s economic accounts. These gains have
increased in importance and are a major cause of
increased volatility in state finances. Capital gains
fell by more than 55 percent, driving down tax
collections in the final quarter of the 2009 fiscal
year, when tax returns reflecting the 2008 stock
market collapse were filed.
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 21
F I G U R E 1
Percent Changes in State Tax Revenue and GDP, 1965–2011
Source: Prepared by the author using data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis.
The net result of these and other forces was
huge declines in state income, sales, and corporate
taxes. Figure 2 shows that annual income taxes
fell by more than 15 percent in inflation-adjusted
terms, sales taxes fell by more than 10 percent,
and corporate income taxes fell by more than 25
percent. Property taxes, which are crucial to local
governments but generally not a significant revenue
source for states, remained quite stable through
much of the period, although they are beginning
to weaken and in some parts of the country have
fallen significantly.
A Slow Recovery
The recession ended in June 2009 and the economy
has been recovering slowly. State tax collections
grew in each quarter of calendar year 2010, and
the character of that growth has improved over
time. In the first two quarters of 2010, increased
tax rates more than offset declines caused by the
weak underlying economy, but in the last two
quarters tax revenue growth was driven primarily
by the improving economy. By the fourth quarter,
tax revenue grew by 7.8 percent, but even with-
out tax rate increases it would have grown by 7.0
percent. Tax revenue in the January–March 2011
quarter grew 9.3 percent compared to the previous
year, and 21 states had double-digit growth.
Preliminary data for the April–June quarter
show tax revenue up 11.4 percent.
Inflation-adjusted state tax revenue for the
nation as a whole in the latest four quarters (end-
ing in the first quarter of calendar year 2011) was
7.7 percent below the peak attained in 2007. The
heady growth in the first two quarters of 2011
probably cannot be sustained because much of it
appears to have been driven by stock market gains
in tax year 2010, boosting income tax returns in
the second quarter. Those gains almost certainly
will not be repeated in 2011.
In addition, turmoil in European debt markets
and the recent Standard & Poor’s downgrade of
U.S. long-term debt have contributed to fears of
a double-dip recession. There are indications that
economic growth will be slower than most states
have assumed in their current budgets. States are
closer to the bottom of the cliff than the top, and
are at risk of falling back down. Meanwhile, there
are some signs that local government tax revenue
also is beginning to weaken.
While tax revenues are now growing in most
states compared to the last year’s low collection
rates, they have not reached the levels prior to
the recession. After adjusting for inflation, tax
revenues for the latest four quarters are below the
calendar year 2007 level in 43 states, and revenues
-18%
-15%
-12%
15%
-9%
-6%
-3%
0%
3%
6%
9%
12%
18%
1
9
6
5
1
9
6
7
1
9
6
9
1
9
7
1
1
9
7
3
1
9
7
5
1
9
7
7
1
9
7
9
1
9
8
1
1
9
8
3
1
9
8
5
1
9
8
7
1
9
8
9
1
9
9
1
1
9
9
3
1
9
9
5
1
9
9
7
1
9
9
9
2
0
0
1
2
0
0
3
2
0
0
5
2
0
0
7
2
0
0
9
2
0
1
1
Real GDP
Real state tax revenue
Recession
22 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
Source: Prepared by the author using data from the U.S. Census Bureau and
U.S. Bureau of Economic Analysis.
F I G U R E 2
Varying Trends in Personal Income, Sales, Corporate Income,
and Property Taxes During and After the Recession
are 10 percent or more below that level in 20 of
those states. Among the seven states showing a
positive shift in revenue collection, only Oregon
(8.9 percent), Delaware (13 percent), and North
Dakota (62.9 percent) are at levels above 2 percent.
State and Local Government Responses
States hit by falling revenue also face rising entitle-
ment costs driven in large part by Medicaid enroll-
ment, which typically increases after unemployed
workers exhaust health insurance benefits. Accord-
ing to the National Association of State Budget
Officers (2011, ix), Medicaid enrollment rose by
8.1 percent in fiscal year 2010, and by an estimat-
ed 5.4 percent in fiscal year 2011; states project a
further increase of 3.8 percent in fiscal year 2012.
These and other types of required expenditures
cause further stress in the day-to-day operations
of state and local governments.
It is difficult to measure the impact of spending
cuts on state and local programs, but changes in
state and local government employment can be
tracked. Although private sector employment fell
sharply from the beginning of the recession, state
and local government employment continued to
rise modestly for about a year and a half. Shortly
before private sector employment reached its nadir,
state and local government employment began to
decline, and states and localities have been cutting
employment aggressively. Local government em-
ployment is now about 3 percent below its peak,
and state government employment is about
2 percent below its peak.
Education employment in most states is related
primarily to higher education—community colleges,
four-year colleges, and universities—although
some is related to the administrative bureaucracy
for elementary and secondary education, and in
some states it includes part of the K-12 workforce.
State government education employment has con-
tinued to rise significantly throughout the recession
and recovery, reflecting in part the increased de-
mand for higher education that usually comes with
recessions (figure 3). When jobs are hard to find,
many people choose to build skills and knowledge
by entering an education program or extending
their time in school (Betts and McFarland 1995).
Meanwhile, state governments have been cut-
ting noneducation employment at an accelerating
pace, so that it is now down almost 5 percent from
its mid-2008 peak, nearly comparable to the cur-
rent, slightly recovered condition for private sector
employment. In each of the nine previous reces-
sions, state government noneducation employment
either did not decline at all or it declined by much
less, as was the case in the 2001 recession.

Figure 4 shows the same employment data for
local governments, which are being hit increasing-
ly hard by slowing property taxes and cuts in state
aid. Education employment is now down about
3.5 percent from its late-2008 peak, and the non-
education sector is down about the same percent-
age from its peak. There are no signs that these
cuts are slowing, and little reason to believe they
will abate in the near term.
Continuing Fiscal Pressures
The recent improvement in state tax revenue is
welcome, but many challenges remain. States still
face fiscal trouble for four main reasons. First, total
revenue remains well below its peak. Second, the
recession has had lagged fiscal effects, driving up
the demand for many government services, espe-
cially Medicaid, other safety net programs, and
higher education. The recession also has created
other pressures and problems for states by depleting
unemployment insurance trust funds, which may
lead to higher unemployment insurances taxes
in order to repay federal loans.
F E A T U R E A Long Road to State Fiscal Reovery
P
e
r
c
e
n
t

d
i
f
f
e
r
e
n
c
e

f
r
o
m

s
t
a
r
t

o
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r
e
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e
s
s
i
o
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(
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e
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2
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0
7
)
-25
-20
-15
2008 2010 2009 2011
-10
-5
0
5
Personal Income
Sales
Corporate Income
Property
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 23
Source: Prepared by the author using data from the U.S. Bureau of Labor Statistics.
Source: Prepared by the author using data from the U.S. Bureau of Labor Statistics.
Third, state cyclical adjustments are not yet
complete because they must contend with losses in
both federal stimulus aid of more than $50 billion
in fiscal year 2011–12 and the fact that temporary
revenue measures put in place in response to the
recession will expire soon. Fourth, even after this
cycle is fully stabilized, states will have to contend
with large increases in pension contributions and
payments for retiree health care—a pressure that is
likely to build for years to come for several reasons,
including: increasing numbers of retirements by
an aging workforce; the likelihood that health care
costs will continue to rise more quickly than the
overall rate of economic growth (Keehan et al.
2011); and, in the case of some pension systems
and most retiree health plans, years of chronic
underfunding.
States finance these services with unstable
revenue sources, and tax revenue has become
much less dependable over the last two decades,
F I G U R E 3
State Government Employment Trends During and After
the Recession
Z A B O U T T H E A U T H O R
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DONALD BOYD is the executive director of the
national Task Force on the State Budget Crisis, co-
chaired by former Federal Reserve Board chairman
Paul Volcker and former New York lieutenant governor
Richard Ravitch. Boyd is currently on leave from his
responsibilities as senior fellow at the Rockefeller
Institute of Government, where he conducts research
on state and local government fiscal issues. Contact:
donboyd5@gmail.com
Z R E F E R E N C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Betts, Julian R., and Laurel L. McFarland. 1995.
Safe port in a storm: The impact of labor market
conditions on community college enrollments.
Journal of Human Resources 30(4):741–765.
Boyd, Donald. 2011. Recession, recovery,
and state and local fnances. Working Paper.
Cambridge, MA: Lincoln Institute of Land Policy.
Keehan, Sean P., Andrea M. Sisko, Christopher
J. Truffer, John A. Poisal, Gigi A. Cuckler, Andrew
J. Madison, Joseph M. Lizonitz, and Sheila D.
Smith. 2011. National health spending projec-
tions through 2020: Economic recovery and
reform drive faster spending growth. Health
Affairs 30(8): 1594–1605.
National Association of State Budget Offcers.
2011. The fiscal survey of states. Washington,
DC. http://nasbo.org/Publications/FiscalSurvey/
tabid/65/Default.aspx
reflecting in large part the increasing role of
volatile capital gains taxes. Unless and until states
broaden their tax bases to make their revenue
structures less volatile, or develop adequate
reserves, public policy will continue to gyrate
with every turn in the economy.
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F I G U R E 4
Local Government Employment Trends During and After
the Recession
24 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
F E A T U R E Property Taxation and Informality
James R. Follain
Faculty Profile
James Follain is an economist with extensive
experience in the analysis of housing and mortgage
markets. He is currently the principal of James
R. Follain LLC, whose recent contracts have been
with the U.S. Department of Housing and Urban
Development, the Massachusetts Attorney General’s
Office, and the Lincoln Institute of Land Policy.
Follain is also a senior fellow at the Nelson A.
Rockefeller Institute of Government at the Univ-
ersity of Albany/SUNY, and an advisor to FI
Consulting, a financial services firm headed by his
son, Tom, and a former student, Roman Iwachiw.
Prior to the establishment of the LLC and his
move to the Capital Region of Albany, Follain
was a tenured professor of economics at Syracuse
University from 1988 to 1998 and also worked
with various business, government, and policy-
oriented organizations. He has conducted research
on the risks of mortgage lending, the tax treatment
of housing, mortgage choice, suburbanization,
property and land taxes, and the current mortgage
crisis. He has authored and coauthored numerous
publications for academic and broader audiences
and served as the president of the American
Real Estate and Urban Economics Association
(AREUEA) in 1988. He received his Ph.D.
in economics from the University of California
at Davis and his B.A. from the University of
San Francisco. Contact: jfollain@nycap.rr.com.
LAND LINES: How were you introduced to the Lincoln Institute?
JAMES FOLLAIN: My involvement with the Lincoln Institute has spanned 30 years and
has provided me with the opportunity to meet many top people in the field of public
finance. Roy Bahl, now a Regents Professor of Economics and Founding Dean of the
Andrew Young School of Policy Studies at Georgia State University, introduced me
to the Institute in the early 1980s, when we were both on the faculty of the Maxwell
School of Citizenship and Public Affairs at Syracuse University in New York.
We worked together on a major study of tax reform in Jamaica, and I was fortunate
to participate in a study of the country’s land tax with Professor Daniel Holland of
Massachusetts Institute of Technology, who also has a long affiliation with the Lincoln
Institute. One of the outputs of that larger research project was a book, The Jamaican
Tax Reform, edited by Roy Bahl and published by the Institute in 1991. The book is
now out of print, but some information is available at the GSU Web site.
LAND LINES: What are some other highlights of your work with the Institute?
JAMES FOLLAIN: In 1988 I participated in the annual TRED Conference that for many
years was held at the Institute’s offices in Cambridge and focused on various aspects
of taxation, resources, and economic development. Professor Edwin S. Mills and I later
coedited a special issue of the AREUEA Journal (1989) based on the six papers and
discussant comments presented at that conference, which was titled “Interactions
between Finance and Urban Development.” The participants included many public
finance economists including Karl Case, Patric Hendershott, John Kain, Rudolph
Penner, John Quigley, Kerry Vandell, and William Wheaton, as well as people rela-
tively new to the profession who have gone on to become leaders such as David
Geltner and Dan Quan.
LAND LINES: I understand you also have worked with Gregory K. Ingram, the Institute’s
current president and CEO.
JAMES FOLLAIN: Yes, that’s correct. Early in my career I had the opportunity to
work closely with Greg when he led the World Bank City Study project in Bogotá,
Colombia. Greg and his team collected data that were used in a number of studies
that I coauthored with Emmanuel Jimenez, Steve Malpezzi, and others. In a paper
on housing characteristics in developing countries (Follain and Jimenez 1985), we
used the data set assembled by Greg’s team. I remember, for example, having access
to data with geo-coded locational coordinates, which was quite unusual at that time
for the kinds of hedonic price index studies we were doing in the United States or
elsewhere. The broad topic of the work and the project was also at the frontier and
dealt with ways in which squatter settlements could be improved to become better
homes for their residents.
LAND LINES: How did you become involved with the Lincoln Institute more recently?
JAMES FOLLAIN: I reconnected with Greg at the 2010 meetings of the Weimer School
when he was honored as a Halbert C. Smith Honorary Fellow at the Weimer School/
Homer Hoyt Institute in Florida. Established in 1982, the Weimer School is a unique
and effective forum for fostering academic work that improves the quality of decision
making in real estate and land economics. I became a Weimer Fellow in 1991 and cur-
rently serve on the faculty. We host two meetings per year to discuss recent research
by new and current fellows and to recognize others who are working on related topics.
During that 2010 meeting Greg and I initiated a conversation about our common
interest in investigating what is different and important about the most recent house
price bubble-bust. This discussion continued for some time and led to my involve-
ment in a research project sponsored by the Lincoln Institute.
24 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 25
LAND LINES: What research are you working
on currently?
JAMES FOLLAIN: This has been a most
interesting year for me. It began with
publication of a paper supported by the
Research Institute for Housing America
entitled “A Study of Real Estate Markets
in Declining Cities.” A second paper,
coauthored with Seth Giertz of the Univer-
sity of Nebraska, entitled “Using Monte
Carlo Simulations to Establish a New
House Price Stress Test,” was just pub-
lished in the Journal of Housing Economics.
My most recent assignment with the
Lincoln Institute of Land Policy has
resulted in a Lincoln Institute working
paper, also coauthored with Seth Giertz,
entitled “A Look at U.S. House Price
Bubbles from 1980–2010 and the Role of
Local Market Conditions.” We explored
a variety of models to explain house price
growth at the MSA level over the three
decades since 1980. Our findings support
and champion a theme quite consistent
with those supported by the Lincoln In-
stitute over the years—the importance of
recognizing the wide variability of hous-
ing markets and the role of local condi-
tions. We are currently moving forward
on two new projects sponsored by the
Lincoln Institute that focus on the most
recent house price bubble and bust period,
using data from the past decade.
LAND LINES: What are some of the potential
policy implications of this research on housing
bubbles?
JAMES FOLLAIN: One has to do with the
development of policies by the Federal
Reserve Board and other agencies to
combat house price bubbles before they
bust. My sense is that the Fed understands
the limits of standard monetary policy for
this purpose, as evidenced by the growing
literature on this topic. It is in the process
of considering a wider array of macro-
prudential tools that might be used for
this purpose. The tool that I have in mind
is one that I have written about and cham-
pioned in earlier times—geographical
variations in the pricing of mortgage credit
risk that take account of local housing
market conditions.
LAND LINES: Is this work likely to be useful and
relevant to housing market policy in other countries?
JAMES FOLLAIN: I think so. The literature
on house price bubbles is enormous and
includes many recent papers about con-
ditions in China and Europe. In addition,
one of the key results of empirical work
on urban economics over the past few
decades is the similarity of findings across
large cities in different regions. The spatial
distribution of development, decentral-
ization of employment and residences,
declining central densities, and determi-
nants of travel and mode choice show
consistent results across large cities in the
world. These similarities carry over to
many housing market outcomes, indi-
cating that one country can learn from
another’s housing policy experiences.
LAND LINES: How does your work at the
Rockefeller Institute relate to these investigations?
JAMES FOLLAIN: My current focus there
is on the impact of the Great Recession
and the house price bubble-bust cycle
on local property taxes. My concerns
are twofold. First, property values have
declined in many areas and reduced the
value of the tax base. Second, the num-
ber of sales available that can be used
to value properties is greatly diminished,
which can reduce the precision of assess-
ments and increase horizontal inequities.
I have written a couple of case studies
using data from New York State and I
am in the process of developing a larger
project on the topic.
LAND LINES: What prompted you to move
from academia to policy making, and can you
share some experiences as a housing policy
analyst in Washington?
JAMES FOLLAIN: I was attracted by the
possibility of working within an institution,
Freddie Mac, with a dual mission to
expand the securitization of mortgages
and access to credit to low- and moder-
ate-income households. The first part
of my time with Freddie focused on the
affordable housing goals it was mandated
to achieve. The latter part focused on the
development of capital rules for the credit
risk embodied in the mortgages included
in its securities. I moved to the Federal
Reserve Board in 2003 to continue work
on capital adequacy for large financial
banks that invest in residential mortgages.
I testified before Congress in late 2005
Z R E F E R E N C E S
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Follain, James R. 2011. A study of
real estate markets in declining cities.
Washington, DC: Research Institute for
Housing America. http://www.housing
america.org/Publications/AStudyof
RealEstateMarketsinDecliningCities.htm.
Follain, James R., and Seth H. Giertz.
2011. A look at U.S. house price
bubbles from 1980–2010 and the role
of local market conditions. Working
Paper. Cambridge, MA: Lincoln Institute
of Land Policy.
———. 2011. Using Monte Carlo
simulations to establish a new house
price stress test. Journal of Housing
Economics 20(2): 101–119.
Follain, James R., and Emmanuel
Jimenez. 1985. The demand for hous-
ing characteristics in developing coun-
tries. Urban Studies 22(5): 421–432.
Georgia State University. 2011. Jamaica
tax structure examination project (1983–
1987). Atlanta, GA: Georgia State Univ-
ersity, Andrew Young School of Policy
Studies, International Studies Program.
http://aysps.gsu.edu/isp/3619.html
and have written about some of these
experiences. One key insight has to do
with the challenges faced by both indi-
viduals and corporations, especially large
financial institutions, in coming to grips
with the risk of extreme and difficult-
to-predict events.
LAND LINES: What is your view about the
likely pace and character of the housing market
recovery after the recent decline in prices and
construction activity?
JAMES FOLLAIN: I emphasize in my recent
research that house prices have declined
dramatically during the past five years in
many parts of the country, wiping out
massive amounts of wealth among home-
owners and lenders. These declines may
well be justifiable for those areas particu-
larly hard hit by the crisis such as Arizona,
California, Florida, and Nevada. In my
article about declining cities, I discuss
what I refer to as “emerging declining
cities” because the current housing stock
may exceed what future demand will
support. Full recovery in these places will
take many years since house price levels
at their peak reflected wildly exaggerated
expectations of future growth.
26 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
New Lincoln Institute Policy Focus Report

H
igh-speed rail has been adopted
throughout the world, and is
now being planned and devel-
oped in the United States. Over the past
50 years, U.S. transportation spending has
favored the development of interstate
highway and aviation systems. In the mean-
time, countries such as China, Japan,
Spain, France, and Germany have been
investing in modern high-speed rail sys-
tems to satisfy the travel demands of cur-
rent and future generations. As the United
States embarks on the High-Speed Inter-
city Passenger Rail (HSIPR) Program be-
gun in 2009, it can learn from the experi-
ences of other countries in planning, con-
structing, and operating high-speed rail.
Decades of international experiences
with high-speed rail suggests that it could
create similar transportation, economic, en-
vironmental, and safety benefits in Ameri-
can cities and regions. While it requires
high upfront investment, high-speed rail
promotes economic growth by improving
market access, boosting productivity of
knowledge workers, expanding labor mar-
kets, and attracting visitor spending. When
planned thoughtfully with complementary
investments in the public realm, high-
speed rail can promote urban regenera-
tion and attract commercial development,
as shown in several European examples.
High-speed rail has greater operating en-
ergy efficiency than competing modes and
takes up less land than highways.
The initial investment of $10.1 billion
in the HSIPR Program, after years of
minimal federal investment, required that
the federal government and participating
states quickly scale up to the challenge of
laying the groundwork for a foundational
program and implementing it at the same
time. Those states that had the staff capac-
ity, expertise, and experience in rail plan-
ning, such as Illinois, North Carolina, and
Washington, were successful in securing
high-speed rail grants. However, carrying
the momentum of this initial investment
forward has proven to be a struggle in a
difficult fiscal environment, and California
High-Speed Rail: International Lessons for U.S. Policy Makers
High-Speed Rail: International
Lessons for U.S. Policy Makers
Petra Todorovich, Daniel Schned,
and Robert Lane
2011 / 60 pages / Paper / $15.00
ISBN: 978-1-55844-222-1
Policy Focus Report / Code PF029
Ordering Information
Contact Lincoln Institute at
www.lincolninst.edu
is currently the only federally funded Core
Express high-speed rail project moving
forward. In 2011, Congress voted to strip
funding from the program. The expiration
of the legislation authorizing the high-
speed rail program in 2013 may provide
an opportunity to consider policy changes.
This report describes several funding
strategies that have proven to be successful
in other countries, and makes specific pol-
icy recommendations to better position
the federal high-speed rail program for
success.
• Strengthen the federal policy and
management framework by expand-
ing the federal role in planning and pri-
oritizing high-speed rail corridors and
working with the states to secure rights-
of-way.
• Prioritize corridors that meet invest-
ment criteria by clarifying the objec-
tives and desired outcomes of the federal
program and promoting investments in
those corridors that exhibit the charac-
teristics that are indicative of success.
• Establish new mechanisms for
corridor management by develop-
ing legislation that enables the creation
of public infrastructure corporations that
can operate across state and national
borders and attract private investment.
• Plan for maximum land develop-
ment benefits by coupling high-speed
rail station investments with policies that
encourage land development around
station areas. In general, well-connected
stations in center-city locations offer the
greatest potential for urban revitalization.
• Focus initially on the Northeast
Corridor and California, which offer
the best opportunities for Core Express
high-speed rail service in the United
States, by addressing the management and
financing challenges each region faces.
• Secure adequate and reliable fund-
ing by drawing on a full complement of
potential federal, state, and private
sources. Such sources could include in-
creasing existing transportation-related
fees (such as a portion of the gas tax or
ticket surcharges), creating an infra-
structure bank, forging public-private
partnerships, and expanding existing
credit assistance programs.
Z A B O U T T H E A U T H O R S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Petra Todorovich is director of America
2050, a national urban planning initiative
based at the Regional Plan Association to
develop a U.S. infrastructure and growth
strategy. Contact: Petra@rpa.org
Daniel Schned is an associate planner
for America 2050 at Regional Plan Associa-
tion, where he researches high-speed and
conventional passenger rail in the North-
east Corridor. Contact: DSchned@rpa.org
Robert Lane is senior fellow for urban
design at Regional Plan Association and a
founding principal of Plan & Process LLP.
Contact: Lane@rpa.org
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 27
New Lincoln Institute Book

O
ver the past several years, much
has been written about property
rights in land and natural re-
sources by scholars in many disciplines
including economics, political science, his-
tory, and law. This book, based on a 2010
Lincoln Institute conference, addresses the
tendency in social science literature to
oversimplify the concept of property rights
by assuming that only two or three forms
of property rights are appropriate for the
effective use and conservation of resources.
Instead it focuses on recent developments
in our understanding of how various prop-
erty systems are applied to and affect the
use of scarce natural resources.
The chapters explore the multiple as-
pects of diverse resources in the design and
implementation of property rights sys-
tems. The volume also includes a foreword
by Douglass C. North and a keynote chap-
ter by Thráinn Eggertsson, who discusses
issues related to property rights institutions
and the environment using six case studies
from his native Iceland, where relatively
simple and transparent institutions are
ideal for identifying social regularities with
general applicability.
The topics addressed in the other chap-
ters and accompanying commentaries in-
clude: the nature and variety of existing
property systems; new thinking about the
California gold rush; the role of psycho-
logical entitlement in property allocation;
evolving property regimes governing fish-
eries; the evolution of zoning; attributes of
property regimes governing water resourc-
es; the nature of property rights in trad-
able pollution permits; how regulations
sometimes create property; and mecha-
nisms for ameliorating property conflicts
that arise from the presence of endan-
gered species on privately owned lands.
Contents
Foreword, Douglass C. North
Introduction, Daniel H. Cole and
Elinor Ostrom
Property in Land and Other Resources
Property Systems
1. Opportunities and Limits for
the Evolution of Property Rights
Institutions, Thráinn Eggertsson
2. The Variety of Property Systems
and Rights in Natural Resources,
Daniel H. Cole and Elinor Ostrom
The California Gold Rush
3. Gold Rush Legacy: American
Minerals and the Knowledge Economy,
Karen Clay and Gavin Wright
Commentary, Peter Z. Grossman
4. Gold Rushes Are All the Same:
Labor Rules the Diggings,
Andrea G. McDowell
Commentary, Mark T. Kanazawa
Air
5. Property Creation by Regulation:
Rights to Clean Air and Rights
to Pollute, Daniel H. Cole
Commentary, Wallace E. Oates
6. Rights to Pollute: Assessment of
Tradable Permits for Air Pollution,
Nives Dolšak
Commentary, Shi-Ling Hsu
Wildlife
7. Who Owns Endangered Species?
Jason F. Shogren and Gregory M. Parkhurst
Commentary, James Wilson
8. Enclosing the Fishery Commons:
From Individuals to Communities,
Bonnie J. McCay
Commentary, Anthony Scott
Land and Water
9. The Evolution of Zoning Since
the 1980s: The Persistence of
Localism, William A. Fischel
Commentary, Robert C. Ellickson
10. The Meaning of Native American
Land Ownership: A Study in Psycho-
logical Entitlement, Reference Levels,
and Valuation Disparity, C. Leigh
Anderson and Richard O. Zerbe
Commentary, John A. Baden
11. Playing by Different Rules?
Property Rights in Land and Water,
Richard A. Epstein
Commentary, Henry E. Smith
12. A Political Analysis of Property
Rights, William Blomquist
Commentary, Edella C. Schlager
13. Water Rights and Markets in the
U.S. Semiarid West: Efficiency and
Equity Issues, Gary D. Libecap
Commentary, Lee J. Alston
Global Commons Issues
14. Climate Change: The Ultimate
Tragedy of the Commons?
Jouni Paavola
Commentary, V. Kerry Smith
15. Sinking States, Katrina Miriam Wyman
Commentary, Richard A. Barnes
Z A B O U T T H E E D I T O R S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daniel H. Cole is professor of law and
public and environmental affairs at Indiana
University. Contact: dancole@indiana.edu
Elinor Ostrom is the Arthur F. Bentley
Professor of Political Science and Profes-
sor of public and environmental affairs at
Indiana University. Contact:ostrom@indiana.edu
Property in Land and Other Resources
Edited by Daniel H. Cole & Elinor Ostrom
November 2011 / 544 pages /
Paper / $30.00
ISBN: 978-1-55844-221-4
Ordering Information
Contact Lincoln Institute at
www.lincolninst.edu
28 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
W O R K I N G papers
M
ore than 730 working papers are
currently available, including the
results of Institute-sponsored re-
search, course-related materials, and occasional
reports or papers cosponsored with other orga-
nizations. Some papers by associates affiliated
with the Institute’s Latin America and China
programs are also available in Spanish, Portu-
guese, or Chinese. Listed below are the papers
that have been posted since June 2011 at
www.lincolninst.edu/pubs.
United States Programs
John E. Anderson and Richard F. Dye
Are Property Tax Abatements for
Business Structures an Indirect form
of Land Value Taxation?
James R. Follain and Seth H. Giertz
A Look at U.S. House Price Bubbles
from 1980 to 2010 and the Role of
Local Market Conditions
Christian A. L. Hilber
The Economic Implications of
House Price Capitalization: A Survey
of an Emerging Literature
Emily Thaden
Stable Home Ownership in a
Turbulent Economy: Delinquencies
and Foreclosures Remain Low in
Community Land Trusts
Paul Waldhart
The Effect of Increasing the Number of
Property Tax Payment Installments on
the Rate of Property Tax Delinquency
Latin America Programs
Danilo Igliori, Ricardo Abramovay,
and Sergio Castelani
Urban Evolution in São Paulo: Employ-
ment Growth and Industrial Location
(also available in Spanish)
Evolución urbana en São Paulo:
Crecimiento del empleo y ubicación
industrial
Martím Smolka and Ciro Biderman
Housing Informality: An Economist’s
Perspective on Urban Planning
Durfari Janive Velandia Naranjo
and Oscar Sanora Quintero
Effects of Urban Density Regu- lation
on Land Prices: The Case of Bando2
in Mexico City
P R O G R A M calendar
Courses and Conferences
T
he education programs listed
here are offered as open enroll-
ment courses for diverse audi-
ences of elected and appointed officials,
policy advisers and analysts, taxation and
assessing officers, planning and develop-
ment practitioners, business and com-
munity leaders, scholars and advanced
students, and concerned citizens.
For more information about the
agenda, faculty, and registration proce-
dures, visit the Lincoln Institute Web site
at www.lincolninst.edu/education/courses.asp.
United States Programs
MONDAY–THURSDAY, OCTOBER 24–27
Seattle, Washington
National Community Land Trust
Conference
The National CLT Academy is a joint
venture of the Lincoln Institute of Land
Policy and the National Community
Land Trust Network, providing compre-
hensive training on theories and prac-
tices unique to community land trusts.
Numerous courses and other programs
will be presented during the national con-
ference. For more information, contact
the CLT Network at www.cltnetwork.org.
FRIDAY, DECEMBER 2
Boston, Massachusetts
New England Smart Growth
Leadership Forum
Armando Carbonell, Lincoln Institute of
Land Policy; Carl Dierker and Rosemary
Monahan, U.S. Environmental Protection
Agency, Boston; and David Parish,
Federal Home Loan Bank of Boston
This forum brings together leaders from
government agencies, nonprofit organi-
zations, and the private sector who play
a critical role in shaping growth in New
England.
Latin America Programs
MONDAY–FRIDAY, NOVEMBER 7–11
Caracas, Venezuela
Management of Metropolitan
Areas: The Case of Caracas
Martim Smolka, Lincoln Institute of Land
Policy; and Zulma Bolivar, Mayor’s Office
of the Metropolitan Area and Central
University of Venezuela
Topics include international experiences
in the management of metropolitan
areas, coordination among different
levels of government, decentralization,
and the impact of informal settlements.
MONDAY-FRIDAY, DECEMBER 5–9
Montevideo, Uruguay
Informal Land Markets and
Regularization in Latin America
Martim Smolka, Lincoln Institute of Land
Policy; and Claudio Acioly, United Nations
Human Settlements Program, UN-Habitat,
Nairobi, Kenya
This course will examine informality
and the land tenure regularization process
through the analysis of Latin American
and other international cases.
Lincoln Lecture Series
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work of scholars and practitioners who
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programs sponsored by the Lincoln
Institute. The lectures are presented
at Lincoln House, 113 Brattle Street,
Cambridge, Massachusetts, beginning at
12 p.m. (lunch is provided). Consult the
Lincoln Institute Web site (www.lincolninst.
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topics. The programs are free, but pre-
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TUESDAY, OCTOBER 11
The Urban Gauge:
Measuring the Public Interest 
George Thrush, Dean, School of
Architecture, Northeastern University,
Boston, Massachusetts

WEDNESDAY, NOVEMBER 2
Housing Bubbles and Busts
James R. Follain, Principal, James R.
Follain LLC, and Senior Fellow, Nelson
A. Rockefeller Institute of Government,
University of Albany, New York

THURSDAY, DECEMBER 1
Effective Practice in Funding Land
Conservation for Impact
Jay Espy, Kingsbury Browne Fellow, Lincoln
Institute of Land Policy, and Executive
Director, Elmina B. Sewall Foundation,
Brunswick, Maine

WEDNESDAY, DECEMBER 14
Property Tax Abatements
and Land Value Taxation
John E. Anderson, Visiting Fellow, Lincoln
Institute of Land Policy, and Baird Family
Professor of Economics, University of
Nebraska–Lincoln
28 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1
O C T O B E R 2 0 1 1 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 29
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2011–2012 Program
The Lincoln Institute’s annual Program for 2011–2012
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Land Lines
OCTOBER 2011 • VOLUME 23, NUMBER 4
ED ITO R PU B LICATIONS AND MU LTIME DIA PROJE CT C O O RDINATOR

C O N T E N T S

Ann LeRoyer
P R E SI D E N T & C EO

Gregory K. Ingram
C H A I R & C H I EF IN V E ST M E N T O F F I C ER

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The Lincoln Institute of Land Policy is a private operating foundation whose mission is to improve the quality of public debate and decisions in the areas of land policy and land-related taxation in the United States and around the world. The Institute’s goals are to integrate theory and practice to better shape land policy and to provide a nonpartisan forum for discussion of the multidisciplinary forces that influence public policy concerning the use, regulation, and taxation of land. We seek to inform decision making through education, research, demonstration projects, and the dissemination of information through publications, our Web site, and other media. Our programs bring together scholars, practitioners, public officials, policy advisers, and involved citizens in a collegial learning environment. The Lincoln Institute of Land Policy is an equal opportunity institution. Land Lines is published quarterly in January, April, July, and October to report on Institute-sponsored programs.

PAG E 7

PAG E 1 4

FEATURES

2 Exploring the Future of Large Landscape Conservation
JA M E S N. L E V I T T

Notwithstanding evident federal budget constraints, myriad opportunities are available to pursue projects that are expansive in scale, extensive in scope, and able to achieve measureable conservation outcomes.

For More Information
The Lincoln Institute Web site (www.lincolninst.edu) provides a variety of features that make it easy for users to quickly obtain information on land and tax policy issues and on specific education programs, research, and publications. The e-commerce function permits users to order publications and multimedia products and to register for courses. To receive Lincoln Institute mailings and email announcements and to download Land Lines issues and articles, working papers, policy focus reports, and other materials, go to the Web site (www.lincolninst.edu) and select “Register.” After you have registered, you can “Log In” at any time by entering your email address and password. To update your profile, you must log in and then select register.

7 Scenario Planning and the Promise of Open Source Tools
J I M H O LWAY

Sustaining local communities will require mechanisms to envision and plan for the future and to engage residents effectively in the process. Scenario planning is an increasingly valuable way to address these efforts.

14 Land-Based Financing for Brazil’s Municipalities
DAV I D M I C H A E L V E T T E R A N D M A RC I A V E T T E R

Brazil’s chronically low level of public sector investment has resulted in serious infrastructure deficits, often cited as an impediment to its economic development. Municipalities need incentives to increase their fiscal space for investment and other priorities.

20 The Long Road to State Fiscal Recovery
D O N A L D B OY D

Copyright © 2011. All rights reserved. Lincoln Institute of Land Policy 113 Brattle Street Cambridge, MA 02138-3400 USA
Tel: 617-661-3016 or 1-800-526-3873 Fax: 617-661-7235 or 1-800-526-3944 E-mail: annleroyer@lincolninst.edu (editorial content) help@lincolninst.edu (information services) Web: www.lincolninst.edu

The recent recession has been recognized as the worst in memory, and its effects are still being felt. Less well understood is the fact that this recession has been far worse for state governments than the drop in GDP would suggest. D E PA RT M E N T S

1 Report from the President 24 Faculty Profile: James R. Follain 26 New Lincoln Institute Publications: High-Speed Rail: International Lessons for U.S. Policy Makers Property in Land and Other Resources 28 Working Papers/Program Calendar 29 What’s New on the Web
Cypress swamp in South Carolina © iStockphoto

25%

Cert no. SCS-COC-001366

Report from the President

A Global View of Infrastructure and Its Financing
Infrastructure (comprising energy, telecommunications, transportation, water supply, and sanitation) plays an important role in urban land development, and it influences city and country productivity. Data on the amount of infrastructure stocks at the national (but, alas, not the metropolitan) level are available for many developing and high-income countries and support several results summarized here. The amount of infrastructure stocks per Gregory K. Ingram capita across countries is strongly related to per capita income levels—when country incomes double, infrastructure stocks nearly double as well. However, country infrastructure stocks have essentially no association with a country’s level of urbanization once country income is taken into account. This seems surprising because cities have large amounts of infrastructure. But they also have dense populations that use the infrastructure intensively, so per capita urban infrastructure stocks are similar to national levels. The composition of infrastructure stocks also varies systematically with per capita income. Roads have the largest share of infrastructure stocks in the lowest income countries, with water systems second and electric power systems a close third. As country incomes increase, the infrastructure related to electric power systems increases more rapidly than income levels. Infrastructure for water and sewer systems increases less rapidly, and for roads the change is in proportion to income. As a result, in high-income countries electric power systems are the largest component of infrastructure, followed by roads, whereas water, sanitation, and telephone systems comprise only a modest share of their infrastructure. Based on recent rates of economic growth, and using the existing relations between infrastructure and per capita income, developing countries are likely to need to spend about 5 percent of their GDP on infrastructure (3 percent for expansion and 2 percent for maintenance)—currently about $750 billion annually—to maintain existing ratios between infrastructure and GDP. For high-income countries, total spending would be lower, at 1.7 percent of GDP (about evenly divided between investment and maintenance)— currently about $700 billion annually. Countries growing faster than average need to invest a higher share of their GDP so that infrastructure stocks can keep up with economic growth. In some countries, improving the efficiency of service production from existing infrastructure is an alternative to new investment. For example, average electricity losses across countries range as high as 25 percent, and leakage and unbilled water can exceed 30 percent. Reducing such high losses can forestall the need for additional capacity. Somewhat surprisingly, performance within countries across sectors varies greatly—efficient performance by a country in one infrastructure sector is uncorrelated with performance in other sectors. What sources will provide these investment funds, particularly for developing countries? Foreign assistance and development bank financing of infrastructure in developing countries currently total about $40 billion annually, and that figure has more than tripled since 1990 in current dollars. Private investment in infrastructure in developing countries has recently reached $160 billion annually and has grown eight-fold since 1990, also in current dollars. Foreign assistance is directed mainly at energy, transport, and water and sanitation systems, with virtually no funding for telecommunications. In contrast, more than half of private funding goes to telecommunications (particularly mobile telephony), followed by energy. Telecommunications and energy draw more private investment in developing countries because their tariff revenues cover a large share of operating costs, whereas tariff revenues and user fees cover a much smaller share of costs for transport and water and sanitation. Private investment in infrastructure was concentrated in Latin America and East Asia in the 1990s but has spread more evenly across global regions in the 2000s. Despite the growth in international funding, large and growing metropolitan areas in developing countries still need to raise significant sums to finance infrastructure investments. This will involve raising tariffs charged to users, increasing taxes (particularly property taxes) on properties whose value is enhanced by infrastructure investments, and establishing municipal bond markets such as the one being developed in South Africa.

O C TTO B E R 2 0 1 1 OC OBER 2011

• Land Lines • LINCOLN INSTITUTE OF LAND POLICY 1

geographically diverse group of conservationists convened to seek a path forward—in concert with the Obama administration’s recently released report on America’s Great Outdoors (Council on Environmental Quality 2011). we have been able to maintain or increase productivity for wood and harvest levels. Their goals were to advance collaboration on a large landscape scale among landowners. other wood products. Just as we can now appreciate the revival of the White Mountains of New Hampshire from their barren. verdant stature today. and landowners. land managers. and even national boundaries has become a key element in the nation’s multigenerational effort to preserve essential sources of clean water. old growth and late 2 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 . Senator Susan Collins. nonprofit. a cross-sectoral. At the same time.Exploring the Future of Large Landscape Conservation © iStockphoto/Denis Tangney. Jr. and expansive recreational opportunities. and academic sectors They also sought to understand and expand on the example set by large landscape initiatives that are achieving measurable. and renewable energy. forestry and recreation groups. supporting a diverse and robust forest products industry that employs tens of thousands of workers who produce paper. sustainably produced forest products. Republican of Maine. jurisdictional. twentysecond century Americans ought to be able to appreciate how our foresight in working across I property. durable conservation outcomes that will provide benefits for generations to come. as well as myriad initiatives at the state and local level. moonscape-like conditions around 1900 to their majestic. we have been able to protect biodiversity. Levitt n the tradition of previous conservation dialogues. Through this partnership. environmental. reported that “we have done this by building a partnership among government at all levels. the forest products industry. private. and citizens from the public. White Mountain National Forest near the Town of Berlin. New Hampshire James N. Speakers’ Comments The conference speakers emphasized the importance of sustained cooperation across many organizations and sectors to achieve lasting results. Proudly recounting how some two million acres of Maine forestland has been conserved over the past dozen years.

and research sectors in the United States. Of particular importance. While this work serves as a good foundation for the effort ahead. as adults. The session was organized by James N.” said Johnson. Levitt. 74). signer of the original LWCF legislation and the Wilderness Act in 1964: “If future generations are to remember us more with gratitude than sorrow. of President William Howard Taft’s signing of the landmark legislation that allowed for creation of national forests in the eastern part of the country. acting assistant secretary for Fish and Wildlife and Parks of the U. Bendick shared with the assembled group his personal dream that someday his young granddaughters might. a fellow at the Lincoln Institute. The Weeks Act of 1911. Accordingly. Democrat of Vermont.succession forest.S. Will Shafroth. Held in the Members of Congress Room of the Library of Congress. Democrat of New Jersey. he noted. and Harris Sherman. 72). Sherman added that the whole idea of landscape-scale conservation implies that we need to move from performing random acts of conservation to more comprehensive and collaborative large-scale initiatives that engage many agencies and ownership types. and also increase opportunities for tourism” (Levitt and Chester 2011.S. and coastlines around which Americans can build productive and healthy lives” (Levitt and Chester 2011. The enthusiasm for large landscape conservation on the part of speakers from large public and Conservation Leadership Dialogue on The Future of Large Landscape Conservation in America.S. with support from Armando Carbonell. Shafroth noted that it takes considerable creativity and proactive thinking to sustain conservation momentum in these times of sharp budgetary constraints. Holt focused his remarks on achieving a longstanding promise to fully fund the federal and stateside portions of the Land and Water Conservation Fund (LWCF). If Lincoln could create Yosemite in the midst of the Civil War. DC. as well as a number of other legislative initiatives such as the Wildlife Corridors Conservation Act. 400 million people have been able to arrange themselves and their activities across this remarkable country in a way that reconciles their lives with the power. Welch. Shafroth described the hard work and extensive comments that helped shape the America’s Great Outdoors report. 75). we can do our part in a time of tight budgets and economic volatility. nonprofit. director of U. and public access to recreation.S. Welch asserted. O n March 1. and Rush Holt. across the street from the U. not just as it looked when we got through with it” (Henry and Armstrong 2004. academic. Representatives Peter Welch. changed the nature of cooperative conservation involving citizens active in the public. Department of Agriculture. beauty and productivity of the land and water that ultimately sustain us all” (Levitt and Chester 2011. government relations at The Nature Conservancy. Holt was emphatic in urging the conservation community to respond to the need for urgent action for our own sake. We must also leave them a glimpse of the world as it was created. 123). It was evident from the discussions that leaders from every sector stand ready to help implement the cooperative conservation aspirations of Collins. and for the sake of future generations. He reminded the audience that in 1864 President Abraham Lincoln took his attention off a monumental crisis —the Civil War—in order to sign a bill deeding the area of Yosemite to the state of California for public use and recreation. look out from the arch at the gateway to Yellowstone National Park and note that “all across America. stated that “the overall objective of AGO [America’s Great Outdoors] should be to create and sustain a national network of large areas of restored and conserved land. undersecretary for Natural Resources and Environment at the U. and Holt. Bob Bendick. each stressed the importance of perseverance in such efforts. Department of Interior. private. the meeting took place on the 100th anniversary. Capitol in Washington. 2011. because its conservation provisions will be critically important to the success of largescale conservation efforts. water. will be the outcome of the debate on the 2012 Farm Bill. Welch remarked on the value of sustaining land conservation budgets during the current round of budget negotiations. to the day. “we must achieve more than just the miracles of technology. named for Congressman (later Senator) John Wingate Weeks of Massachusetts. shared their frank assessments of the current situation. the Lincoln Institute of Land Policy hosted its tenth annual Conservation Leadership Dialogue with a focus OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 3 . senior fellow and chair of the Department of Planning and Urban Form. grace. He reminded the audience of the admonition of President Lyndon Johnson.

what has been done in the Blackfoot region could be done across the nation. and nonprofit organizations banded together to form a partnership that would protect the remarkable scenic.000 acres. In the late 1980s. South Carolina Wildlife Management Areas. director of the Coastal Conservation League. They explored how institutions. David Foster reinforced that idea by describing the Harvard Forest’s outreach efforts to develop and disseminate its recent report on Wildlands and Woodlands New England (Foster et al. Large Landscape Cases There are many exemplary cases of on-the-ground progress in large landscape conservation across the country from Maine to Montana and from South4 LINCOLN INSTITUTE OF LAND POLICY ern Arizona to Northern Florida. The ACE Basin. state and federal government agencies. As a large landscape initiative. In the area of stream restoration alone. the ACE Basin truly stands out from other efforts. Combahee. covering a contiguous core in the heart of the ACE Basin that stitches together easements on private land. wildlife. One of the longest operating and most important cases is in the ACE Basin in South Carolina’s celebrated Lowcountry. is one of the largest undeveloped estuaries along the U. and private interests such as MeadWestvaco Corporation. the executive director of The Nature Conservancy in South Carolina. among other properties. private. conservation groups and government agencies. Mark Robertson. Matthew McKinney of the University of Montana moderated a dialogue with David Foster of Harvard Forest and Harvard University.5 million acre valley. a National Wildlife Refuge. Among members of the ACE Basin Partnership are federal agencies such as the Fish and Wildlife Service and the National Oceanic and Atmospheric Administration.000 acres that drain into the Ashepoo. Perry Brown of the University of Montana. colleges. and water resources in the region. Perry Brown pointed out that those universities that will play a role in real-world conservation initiatives will not be insular. Stone is emphatic in saying that. within their own walls and beyond. is emphatic: “It’s real importance is that it has given many people for the first time hope that a place of great importance is not inevitably going to be developed” (Holleman 2008). philanthropic organizations and individuals including the Gaylord and Dorothy Donnelley Foundation. and South Edisto Rivers between Charleston and Beaufort. state agencies including the South Carolina Department of Natural Resources. as well as an historic opportunity to expand • Land Lines • O C T O B E R 2 0 1 1 . a group of public.F E A T U R E Large Landscape Conservation nonprofit organizations was strongly reinforced by Jim Stone. the Blackfoot Challenge has helped to engage more than 200 landowners in some 680 projects involving 42 streams and 600 stream-miles that have contributed directly to an 800 percent increase in fish populations in the 1. and a Charleston County natural and historical interpretive center. and large national and small local nonprofits. can use their analytic and convening capacities to advance initiatives with extensive impacts. and Karl Flessa of the University of Arizona. Complementing the program was a panel of researchers and academic officials representing universities. measurable results over the last three decades using a landscape-scale approach.” Asked about the significance of the progress in the ACE Basin to date. with the right people in the right places. Next Steps The leadership dialogue concluded with general agreement that there is a great deal of work to be done. a private landowner and ranch operator in Montana’s Blackfoot Valley. Atlantic seaboard (figure 1). Partnership members have conserved more than 134. 2009). national nonprofits including The Nature Conservancy and Ducks Unlimited. but rather will cherish their relationships with nonacademic partners such as Indian tribes. Initial small successes were critical to building the foundation of trust that led to larger successes later (Williams 2011). comprised of some 350.S. Stone’s colleague Jamie Williams of The Nature Conservancy explained that the Blackfoot Challenge has achieved remarkable success over the years because it has taken the time to engage so many landowners and partners in consensusbased approaches to conservation. Stone helped to start the Blackfoot Challenge. has noted that the effort “set a standard of how to get conservation done on a large scale using collaboration between private landowners. a grassroots organization that has yielded impressive. and research institutions that are helping to catalyze large landscape initiatives. Dana Beach. local nonprofits including the Coastal Conservation League and the Lowcountry Open Land Trust.

the networks have an opportunity to reach out to international partners with lessons to share. Such intersectoral. private. and enhanced sustainable production of forest products. and international). OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 5 . Such research efforts should be more regionally relevant and cost-effective if they involve cooperation among a wide assemblage of public and private organizations. The discussion of next steps was organized to focus on four types of initiatives.S. Notwithstanding the need to be grounded in local realities. the Regional Plan Association’s Northeast Landscape Partnership database) to offer a more comprehensive picture of existing public. on-the-ground issues of vital concern to field practitioners and landowners. Research Another immediate need is to build on existing maps and inventories (e. In the political sphere. and. these dialogues should connect with conservation caucuses at multiple layers of government (local. county. and envision new ones. performance over time. Of particular importance is research that is able to identify where. property owners and land managers. and conserva- Myrtle Beach Charleston Protected public and private lands Charleston. federal. and nonprofit initiatives. and the U. when. a program of the Lincoln Institute. While the dialogues may be able to take advantage of the socially neutral nature of universities as conveners. They might also serve to augment environmental education initiatives that already are spread thin.. private. regarding the very timely opportunities to realize landscape-scale conservation initiatives across the nation. increased wildlife populations. interdisciplinary discussions are most likely to come up with creative solutions and novel ideas. university faculty and students. and how certain efforts are able to yield measurably improved ecosystem services. FIGURE 1 The ACE Basin and Coastal South Carolina Policy Dialogues There is a need for ongoing policy dialogue. such as improved water quality. As they evolve. Within their own territories. and to identify the key factors of success for initiatives that are able to show significant measureable results. large landscape conservation networks need to be linked to diverse constituencies. including the Large Landscape Practitioners Network. they nevertheless need to be responsive to the practical. The dialogue should celebrate existing success stories about both cultural and nature-oriented properties (both being highly valued by the public). Fish and Wildlife Service’s Landscape Conservation Cooperatives (LCCs).g. including philanthropists interested in landscape-scale conservation. and Dorchester Counties ACE Basin Hilton Head Urbanized areas Source: South Carolina Coastal Conservation League. Berkeley. state and federal decision makers. A more comprehensive overview of nationwide efforts should be of particular use to groups and networks working to advance the practice of large landscape conservation. both among conservationists in the public.on initial progress in the field of large landscape conservation. the networks are likely to nest within one another at larger and larger geographic scales. tion outcomes of landscape-scale initiatives. a range of public agencies. including the Large Landscape Practitioners Network and the LCCs mentioned above. Networking A number of large landscape networks have been created recently or are now emerging. Additional research is also needed to measure the impacts. but they will also need to focus on sharing knowledge and building capacity at the local level to yield lasting results. state. nonprofit and academic sectors and between the conservation community and local. the dialogue should reach across disciplines and institutional boundaries. most importantly. consider ongoing regional conservation efforts. In nonprofit and academic contexts.

and C.... Irland.... Conservation Capital in the Americas: Exemplary Conservation Finance Initiatives. New Mexico.. Holleman.edu/pubs/dl/1923_1246_LLA_071103. Lynn Scarlett....edu R E FE RE NCE S . the Crown of the Continent in Montana... ———.. MA: Lincoln Institute of Land Policy. and Shawn Johnson... Donahue. Redlands... the Chattahoochee/ Apalachicola basin in Georgia. Wildlands and woodlands: A vision for New England. http://americasgreatoutdoors. and the David Rockefeller Center for Latin American Studies at Harvard University. Mississippi.. D.. lincolninst.. Another participant noted the potential significance of state and federal transportation budgets that could be used to mitigate the disruptive impact of new roads and highways. and Florida. They also may be used in the future to address water supply protection issues. and enduring.com/2008/11/10/584599/ace-basinprotected-forever.. November 10... nature. These individuals and their colleagues at home and abroad are now and will continue to be at the forefront of initiatives that protect nature in the context of human values at a scale commensurate with the conservation challenges they face. http:// www. A... Scaling up conservation for large landscapes. James N. CA: ESRI. Fallon Lambert.. and Daniel Kemmis.. selected opportunities for foundation Program-Related Investments (PRIs).. K.... such as those in California... Chester.. L. Harvard University.. 2005. http:// www... Mapping the future of America’s national parks: Stewardship through geographic information systems... including mitigation banking and statewide markets for carbon credits. Cambridge.. Land Lines 23(3): 8–13...... B. Council on Environmental Quality.. Demonstration and Implementation Given what are expected to be very tight constraints on new conservation programs at the federal.. and emerging ecosystem service markets assisted by federal policy and public-private partnerships. LEVITT is a fellow in the Department of Planning and Urban Form at the Lincoln Institute of Land Policy and director of the Program on Conservation Innovation at the Harvard Forest. MA: Lincoln Institute of Land Policy.thestate.. Examples include Santa Fe.. A. The conference participants themselves offered clear evidence that the concept of large landscape conservation has spread to initiatives across the continent. One noted the significant role that is already being played by the Department of Defense to conserve (and limit development on) lands adjacent to active military reservations.. Matthew J. Kittredge.. Conclusion Notwithstanding evident federal budget constraints. DC: Government Printing Office..F E A T U R E Large Landscape Conservation AB O UT T HE AUT HOR . 2008. From Walden to Wall Street: Frontiers of conservation finance... Petersham.. MA: Harvard Forest..... Contact: jlevitt@lincolninst. 2011. Henry.... Joey. Hunter.... Harvard Forest Paper 32.. Working across boundaries: People. D. and Charles N. James N. Alberta.... MA: Lincoln Institute of Land Policy... Cambridge. state..... Orwig.... and Leslie Armstrong. JAMES N. Mark.. Cambridge.. community forest programs that are now gaining momentum around the nation. R E L AT E D RE SOURCE S .. B... in collaboration with Island Press.. America’s great outdoors: A promise to future generations.. McKinney... The future of large landscape conservation in America. Ellison. able to achieve measureable conservation outcomes. Hall.. D’Amato. The State....pdf... myriad opportunities are available to pursue conservation projects that are expansive in scale.. Particularly enthusiastic support came from several participants for public-private-nonprofit partnerships that have a proven track record for protecting and enhancing locally valued natural and cultural resources to form the backbone for a regional green infrastructure. 2009.. Washington. Jamie. Large landscape conservation: A strategic framework for policy and action. participants focused much of their attention on the creative use of existing budgets for landscape-scale conservation purposes.. Ace Basin: Protected forever...html#ixzz1W3yQd7KP Levitt. extensive in scope... 6 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 . the matching monies required by funds provided by the North American Wetlands Conservation Act). DC: Island Press and the Lincoln Institute of Land Policy. Additional opportunities for funding large landscape conservation initiatives include state incentives for private land protection that can be used to match selected federal programs (e.... Colburn. 2011. Cogbill. gov/report Foster....g. Local/Metro Section... M. and British Columbia.. and local levels over the next few years... E. Levitt. MA: Lincoln Institute of Land Policy.. the Ash Institute for Democratic Governance and Innovation at the Harvard Kennedy School.. Such programs are now being used effectively to protect habitats and working lands from development and to limit landscape fragmentation.. ed.. Washington..edu/pubs/1916_The-Future-of-LargeLandscape-Conservation-in-America Williams. Cambridge. 2010........ 2004.lincolninst... 2010.... McKinney Matthew J.. 2009.. and the New Jersey Highlands. https://www. D. 2011.. and regions..

Scenario planning is an increasingly effective way to address these efforts. it becomes ever more important to consider the full range of emerging conditions and to strive to ensure our ability to respond to those changes. as the scope and complexity of planning and the demand for broader engagement have increased. The Lincoln Institute has a long history of supporting the development of planning tools and publishing the results (Hopkins and Zapata 2007. This article covers lessons learned from OCTOBER 2011 Foothills of the Superstition Mountains in the northeastern corner of the Superstition Vistas parcel. • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 7 . and Western Lands and Communities. Increased polarization means that more civic engagement and an informed and supportive public are needed to ensure stable policies and adequate investments in a community’s future. and Miller 2009). Scenario planning offers a mechanism to address these needs and issues of potential uncertainty and conflict. and environmental dimensions. social. economic trends. Key areas of uncertainty include population and demographic changes. Fortunately. the Lincoln Institute of Land Policy’s joint venture with the Sonoran Institute. climatic variability and change. Simultaneous with increasing uncertainty and decreasing resources. and pursue investments that will be resilient across a variety of potential futures. As uncertainty increases and available resources decrease. Cavens. Kwartler and Longo 2008. is working to advance the necessary tools. advances in computing power and public access to technology are making new and more powerful tools available. housing affordability. S Scenario Planning to Address Uncertainty Land use decisions and planning efforts are critical as communities look 20 to 50 years into the future to guide policy choices and public investments that are sustainable across economic. resource costs and availability. or perhaps in part because of them. Brail 2008. land markets.Scenario Planning Tools for Sustainable Communities Courtesy of Superstition Vistas Steering Committee Jim Holway ustaining local communities will require mechanisms to envision and plan for the future and to engage residents in the process. and the fiscal health of local governments. decision makers face conflicting perspectives on desired futures and on the role of government in providing services and infrastructure as well as regulation and planning. Campoli and MacLean 2007. housing preferences. adopt policies. Condon.

WLC. and the Lincoln Institute. • advance the Arizona State Land Department’s capacity to conduct large-scale planning and establish an example for other state land agencies facing urban growth opportunities. the regional electric and water utility. and hire a consulting team.F E A T U R E Scenario Planning Tools for Sustainable Communities the use of scenario planning tools in several projects undertaken by Western Lands and Communities (WLC). conducted extensive public outreach and values research. and Tuell 2006). through the WLC joint venture. and opportunities to catalyze a planning process. More specifically. secure funding. and produced a composite scenario for the site. • design a model sustainable development. State trust lands such as this site in Arizona are key to future growth patterns because the state owns 60 percent of the available land in the path of development. holistic. as well as mechanisms to expand their application. and comprehensive manner. • catalyze and inform debates about modernizing state trust land planning and development management. formed the Superstition Vistas (SV) Steering Committee to advance the planning effort. Sustainability Lessons The scenario analysis. The county is now considering the proposed amendment and its Board of Supervisors is expected to act in late 2011. FIGURE 1 Initial WLC objectives for Superstition Vistas scenario planning included capacity building. The Arizona State Land Department (the landowner) adapted the consultants’ work to prepare a draft conceptual plan for Superstition Vistas in May 2011 and submitted a proposed comprehensive plan amendment to Pinal County. The inclusion of individual building and infrastructure costs for the alternative scenarios facilitated examining the sensitivity of varying these key factors and the cost effectiveness of four increasing • Land Lines • O C T O B E R 2 0 1 1 8 LINCOLN INSTITUTE OF LAND POLICY . utilizing enhancements supported by WLC. we sought to: • look at the land in a bold. The consultants. developed and refined a series of alternative land use scenarios for the development of a community of 1 million residents. and a local mining company. was an early proponent of these efforts (Propst 2008). identified the most important factors in shaping development patterns and potential conflicts among desired outcomes (figure 2). and • stimulate a larger discussion about the Arizona Sun Corridor megaregion. The Superstition Vistas Site near Phoenix. Arizona Source: Fregonese Associates. working with the committee over a three-year period. assembled data on Superstition Vistas. neighboring jurisdictions. evaluated the impacts of the different scenarios. Superstition Vistas Superstition Vistas is a 275-square-mile expanse of vacant state-owned trust land on the urbanizing edge of the Phoenix metropolitan area (figure 1). along with regional partnerships. Creative thinking about the future of Superstition Vistas began to gain momentum in 2003. Laurenzi. tool development. Colorado and New Mexico to a lesser degree face similar opportunities with their state trust lands (Culp. • advance scenario planning tools and illustrate their use. two private hospital providers.

and multimodal transportation systems all strong local economy and a diverse balance of nearby jobs. The consulting team. The scenarios also examined the impact of urban form on vehicle miles traveled (VMT). A OCTOBER 2011 .7 Miles 0 5. more compact forms of urban development. energy use. VMT. housing. and shops are critical for a sustainable community. with enhanced trust land management authorities providing access to resources for upfront capital investment and the ability to recapture these investments when the land is sold or leased later at a higher value. working with the Steering Committee. Scenario model outputs included land use indicators. and the carbon footprint.8 2. State owned trust land could also provide unique opportunities for patient capital. • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 9 to catalyze economic success. energy use. Smaller homes. However. Significant upfront public investment and public-private partnerships can supply critical infrastructure and have an enormous impact on shaping development and increasing the value of state trust land.FIGURE 2 Three Possible Scenarios for the Development of Superstition Vistas Scenario X Scenario A Density Low Medium High Scenario D Three of the six scenarios produced by the Superstition Vistas consultants illustrate the range of development intensity and developed area. energy use.000 10. Create mixed-use centers to reduce travel times. 0 0. the scenario modeling for Superstition Vistas demonstrated that mixed-use centers would be substantially more important than increased density in affecting transportation choices. carbon emissions. Scenario A has a minor density increase over current trends in other parts of the region. levels of energy and water efficiency in each building type. Scenario X is the base case with no comprehensive planning.000 15. 1. 2. and the carbon footprint.000 Feet Study Area Existing Road Creeks and Washes Central Arizona Project 100 Year Floodplain Rail Stop Regional Rail Freeway Arizona Parkway Major Road Source: Superstition Vistas Consulting Team (2011). identified a number of lessons that illustrate the value of scenario planning tools and can be applied to other efforts to design more sustainable and efficient urban areas (Superstition Vistas Consulting Team 2011). Scenario D focuses on high-density urban centers. This analysis revealed the “low-hanging fruit” for sustainability improvements. energy and water use. Mixed- create similar benefits (figure 3). and construction costs. especially when high-quality jobs are provided at the beginning of development. and the resulting carbon footprint. Foster upfront investments and high-quality jobs use centers along public transportation routes and close to homes and neighborhoods are one of the most effective ways to reduce travel times.9 1.

should be expected in any long-term. and external factors. good. and even political perspectives during the course of planning and implementation. perspectives. better.F E A T U R E Scenario Planning Tools for Sustainable Communities FIGURE 3 Carbon Footprint of Transportation and Building Emissions 9 renewable power generation may be a better investment than extreme conservation. Incorporating construction costs and return on investment (ROI) data in resource planning allows for financial feasibility and cost-benefit calculations.49 1. agreeing on mechanisms to transfer knowledge to new participants. Such challenges need to be considered and incorporated into project tasks.38 0. Ensuring Scenario D challenge for large-scale master plans that will take shape in multiple phases over 50 years or more is how to plan so the development itself can evolve and even redevelop over time. best) for each scenario and building type. A 0 Baseline Good Better Best 2.06 5. Another critical step is determining how to phase transportation improvements as the region grows and the market can support increased services.32 8. better.85 1.83 4.61 1.65 1. Long-term projects need to accommodate changes in stakeholders.82 2.71 1. 4.95 0.39 0.54 6. Given the recent economic downturn. Design for change. decision makers. The consulting team modeled four levels of water and energy use (baseline.34 3. multiparty project. understanding how to deal with political or market conditions that will 10 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 . Agreed-upon procedures and planning processes become increasingly important as the planning and development time period grows and the number of stakeholders increases.45 3.51 0.66 5. Phased components may include buses first. Projects would benefit enormously from anticipating such changes.25 Source: Fregonese Associates.04 8.28 4. and to the expanded use of scenario planning for community decision making in general. as well as the limited capacity of the state agency to bring land to market. Transportation fuel and building energy use (baseline.58 5.87 0. 5. Provide multimodal transportation infrastructure and regional connections to facilitate efficient growth. 6.31 3.51 2.38 1.13 1.50 0. and best improvements) impact carbon emissions differently in three of six Superstition Vistas scenarios. such as the recent collapse of the development economy.98 0.80 0.47 3. Offer housing choices that meet the needs of Scenario A Scenario X Transportation Building Total Tons of CO2 Emissions per Year per Capita 8 7 6 5 4 3 2 1 a viable community means meeting the needs of all potential residents with a broad variety of development types and prices that local workers can afford and that allow for adjustments under future market conditions. procedural lessons learned in the project to date are relevant to other longterm and large-scale efforts.00 1.84 2. Incorporate flexibility to respond to changing a diverse population. An additional finding showed that building centralized Procedural Lessons The visioning process for Superstition Vistas involved planning a completely new city or region of communities in a vacant area with a single public landowner and no existing population.21 3.63 2. 1. Despite these particular conditions. Identifying and building multimodal transportation corridors and infrastructure prior to sales for residential and commercial development should establish the cohesiveness of the entire area and enable the evolution to more capital-intensive transportation infrastructure as the community matures. Results demonstrated that investments in energy efficiency would be better spent on residential than commercial and industrial buildings. Significant changes in participants. Plan implementation needs to include mechanisms to limit future NIMBY (not in my back yard) problems for necessary infill and redevelopment projects.59 1. 3. with rights-of-way set aside for eventual commuter or light-rail corridors. then Bus Rapid Transit (BRT). establishing certain criteria and decisions that new stakeholders would be expected to follow.93 5. development of this area will likely be postponed for a number of years. circumstances. with good. Design efficient buildings that save water and energy resources and reduce the community’s carbon footprint.

• Land Lines • LINCOLN INSTITUTE OF LAND POLICY 11 OCTOBER 2011 . Phase development. Incorporate new community designs into local is also critical to consider how a project at the scale of Superstition Vistas. and utility services can significantly shape a community. housing preferences. Projected housing mixes and estimates of development absorption need to be flexible and not based only on current preferences and trends. 3. whether on private lands or state trust lands. Communities need to establish mechanisms that allow the adoption of a long-term buildout vision and then incorporate a series of flexible and adaptable phased plans to implement that vision in appropriate stages. Demonstrating how development proposals connect to common visions and values that are shared and stable over time is also important.change. and ecosystem services. In building a new city it is important to consider how to create a governance system capable of implementing a consistent. education. Market conditions. mixed-use neighborhoods can help to gain public acceptance. 5. and employment opportunities will evolve. To achieve this potential. 4. Since the overall effort to conceptualize and implement development plans for Superstition Vistas is just beginning. with up to 1 million residents and a buildout plan of 50 years or more. serve as a catalyst for higher-level employment. The recent collapse of land and housing markets throughout the country has also impacted this project and local perceptions of future growth potential. Connect to common values. planning. 2. upfront investments in transportation. This is an issue for planning and implementation efforts and for the political decision-making structure of a new community. The Arizona State Land Department has been unable. and large-scale projects with creative and compelling visions may even create their own demand. and building resiliency for such factors into the alternative scenarios themselves. initial on-the-ground development is not expected for at least a decade. Neighboring commu- nities. mechanisms are needed to facilitate these investments. comprehensive vision for a community that does not yet exist. values such as an opportunity for healthy lifestyles and choices for residents across the socioeconomic spectrum were found to be broadly accepted. Scenario planning and effective visualizations become both more important and more challenging to achieve when conducting larger and longerterm visioning exercises. The community came together through the Steering Committee to develop a consensus vision that represented multijurisdictional cooperation around sustainable “smart” growth. In addition. It Challenges and Opportunities The WLC experience in planning for Superstition Vistas has been successful in several respects. the Arizona State Land Department developed a plan for a geographic scale. Planners also need to recognize values that are more controversial or may be transient and likely to change. There will be multiple opportunities to build on these planning efforts to bring bolder and more comprehensive visions forward as the real estate economy recovers and the land becomes ripe for development. economic development. Consider governance. However. can be incorporated into the framework of a typical county comprehensive plan. Visualizations that provide compelling depictions of activity centers and higher-density. and earn high returns. as well as the integration of this information into scenario planning. 6. infrastructure investment. to push the envelope very far on new and more creative ways to conceptualize large-scale developments that could enhance the economic value of state trust lands and improve regional urban form. at the request of the state land commissioner. so consideration of alternative markets and adaptable community designs are critical. Continued work on the contributory value of land conservation. As noted earlier. For Superstition Vistas. Scenarios and visions must reflect ideas and plans that local jurisdictions will be politically willing and administratively able to incorporate into their planning processes. Effective mechanisms are also needed to convey to current participants that the planning process is imagining community characteristics and housing and lifestyle preferences for their grandchildren or great-grandchildren many years in the future. deferred any consideration of annexation. and regional comprehensive plans. at least so far. the proposed comprehensive plan amendment for Superstition Vistas is at best a first step toward a vision for a community of up to 1 million people. time horizon. No one knows what future markets may offer. and level of comprehensiveness well beyond anything attempted previously. Plan for market changes. would greatly aid efforts to address uncertainty and advance community sustainability.

(2) additional information on land characteristics. This project focused on stakeholder education regarding the mechanisms necessary to implement recently adopted comprehensive plans calling for Figure 4c Figure 4a shows the current condition of a site in downtown Rifle. Lessons learned include recognizing that (1) for many participants working with paper maps was more intuitive that the touch screen technology we had employed.S. should be used in preparing growth scenarios. Garfield County. including sustainability impacts. U. of directing future growth to the triangle area of Gallatin Valley. Figure 4a Figure 4b Gallatin County. and Four Corners. Products from this Montana project will include the creation of a library of regionally appropriate building types for use with ROI and scenario modeling and a report examining the costs and benefits. Colorado. Environmental Protection Agency. With WLC support MSU has been able to incorporate the use of scenario planning tools in its graduate program. as well as to incorporate political and market realities that are not typically captured with scenario planning tools. This effort successfully integrated Envision Tomorrow scenario planning with housing unit projections from the Sonoran Institute’s Growth Model and demonstrated the value of ROI tools as a reality check on proposed land use and building types. Colorado Other Projects and Lessons Learned WLC conducted three additional demonstration projects to further enhance scenario planning tools and apply them in different situations. 12 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 . and (3) more effective techniques are needed to visualize the density and design of different land use types. Montana Sonoran Institute staff worked with Montana State University (MSU) to engage local stakeholders in a workshop where each of four teams produced scenarios for concentrating projected growth within the currently developed “triangle” region of Bozeman. Colorado Sonoran Institute’s Western Colorado Legacy Area office. with support from the Lincoln Institute. The project also demonstrated the value of scenario planning to local experts. and other local contributors.F E A T U R E Scenario Planning Tools for Sustainable Communities FIGURE 4 Alternative Visions for Downtown Rifle. utilized the Envision Tomorrow tool in a new way to advance implementation of previously adopted plans calling for mixed-use infill and redevelopment in target growth areas. Figures 4b and 4c are computer-generated visualizations of redevelopment options for that site. Belgrade. Source: Fregonese Associates. such as soil productivity and habitat values.

making integration of tools and data difficult. but in the current market even three-to-four-story projects are not considered feasible (figure 4c).... (2) the cost and availability of data. local officials. Kwartler..... Contact: JHolway@ sonoraninstitute. and Nicole Miller...... 2007. ultimately resulting in faster innovation and greater utilization. Tuell....... 2009... Urban planning tools for climate change mitigation... and Cynthia C.. planning commissioners........ As a result of our work with Envision Tomorrow on the Superstition Vistas project.. State trust lands in the West: Fiduciary duty in a changing landscape.... Visualizing density. Richard K......org LI N C O LN I N STI TU TE P U B LI C ATI O N S . Andy Laurenzi... Arizona....... A model for sustainable development in Arizona’s Sun Corridor.. The tools being developed for this effort will be useful to land trusts throughout the country that are interested in engaging partners on local and regional planning issues OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 13 .. and Marisa A.. California This area of high open space and wildlife habitat values between Joshua Tree National Park and the Marine Corps Air Ground Combat Center in Southern California may be impacted by spillover from regional growth........ WLC and other members of an open source planning tools group are continuing to advance scenario planning tools and pursue the promise of open source tools that can foster sustainable communities in many more locations. was one of three separate efforts undertaken.. Most attention now is given to two-story mixed-use projects and townhomes..... Campoli. and (4) proprietary tools that may be difficult to adapt to local conditions and may impede innovation.. 2006. Hopkins. Superstition Vistas: Final report and strategic actions....... Peter W. scenarios. Michael. This project with the Morongo Basin Open Space Group involves an innovative effort to link results from the ongoing conservation priority-setting efforts with both a GIS tool to analyze and predict how land use patterns impact wildlife habitat and the scenario planning capability of Envision Tomorrow. Engaging the future: Forecasts. these findings spurred discussion about the role of public-private partnerships in catalyzing downtown development....... Condon..... and plans.... pixels... Julie. including property owners. Culp.. 2008.. Superstition Vistas Consulting Team.. previous planning efforts in Rifle had focused on six-to-eightstory mixed-use buildings... state transportation representatives..... Patrick M. and incorporating larger landscape conservation and wildlife habitat goals into their projects. Among the lessons learned from this project was the importance of grounding bold visions with market reality... Zapata.. based in Phoenix..... and Gianni Longo..... In addition to pinpointing changes in Rifle’s building code.. and local staff.... Lewis D. Propst.. developers... Examination of policy and market feasibility for redevelopment in downtown Rifle..... rather than on scenario generation for a comprehensive plan.. Visualizations for an underutilized parcel in the center of town illustrated the type of onestory option that may be most feasible for initial commercial development (figure 4b). We are evaluating the environmental impacts of the current and potential alternative development patterns and location-specific planning and land use options.... Brail. AB O U T TH E AU TH O R . 2008.... www. plans... Morongo Basin.. Proponents of open source modeling tools believe open and standardized coding will facilitate increased transparency and interoperability between models.. Constraints related to parking requirements and high minimum lot coverage requirements were also identified as limits on investment. 2011.... (3) a lack of standardization.. Open Source Planning Tools Western Lands and Communities has recently been focusing on efforts to develop open source planning tools as a mechanism to increase the use of scenario planning..... For example. Land Lines 20(3). Luther..... MacLean.. Duncan Cavens... The City of Rifle project successfully utilized an ROI tool to identify financial and regulatory factors that could impact revitalization efforts and engaged the key parties necessary for implementation. JIM HOLWAY directs Western Lands and Communities....superstition-vistas..town-centered development... 2007. Visioning and visualization: People.. and projects. He was previously assistant director of the Arizona Department of Water Resources and a professor of practice at Arizona State University.. Colorado.... the Lincoln Institute’s joint venture with the Sonoran Institute.. Key factors that hinder their use include: (1) the cost and complexity of the tools themselves. and Alex S.. 2008...org R EFER EN C ES . Planning support systems for cities and regions. realtors.

Backlog in municipal infrastructure is estimated at about $40 billion over the next 10 years” (World Bank 2006. Heller (2005. 1) defines fiscal space as “room in a government’s budget that allows it to provide resources for a desired purpose without jeopardizing the sustainability of its financial position or the stability of the economy.5 percent for Russia (Afonso and Junqueira 2009b). and 4. The Potential of Land-Based Instruments Traditionally Brazil’s municipalities have been considered more often a potential source of fiscal problems than of fiscal space. Brazil’s municipalities face an urgent need to invest in infrastructure. including the Fiscal Responsibility Law of 2000. Within this framework of tight fiscal controls and fiscal discipline.8 percent for China. Brazil has controlled the consolidated public sector debt of states and municipalities through a complex web of restrictions on borrowing by them or lending to them. 7. This article explores how Brazil can provide funding for much-needed infrastructure investment while controlling the consolidated national and subnational public sector deficits and debt as required to maintain price stability and an investment grade sovereign rating. could Brazil’s municipalities generate fiscal space for investment and provision of social needs by increased use of land-based financing? One indication of the potential for creating such fiscal space is that municipal investments already are quite substantial. To maintain financial sustainability and economic stability.8 percent in 2006–2007. but lack the “fiscal space to do so due to the fiscal constraints in the country’s macroeconomic program. David Michael Vetter and Marcia Vetter razil’s chronically low level of public sector investment has resulted in serious infrastructure deficits that are often cited as an impediment to its economic development.3 percent for India. xix). Brazil’s average gross formation of public capital (GKP) as a percentage of gross domestic product (GDP) was only 1.Land-Based Financing for Brazil’s Municipalities © Gislene Pereira Infrastructure investments are improving roadways in Curitiba. ranking second from the bottom for 28 emerging countries and last among the BRIC countries: 20. constituting 14 LINCOLN INSTITUTE OF LAND POLICY . The rise • Land Lines • O C T O B E R 2 0 1 1 B of private financing for infrastructure in Brazil in the 1990s was not enough to compensate for the public decline (World Bank 2007). Brazil.” Although public capital formation among countries varies due to their respective publicprivate divisions of expenditure responsibilities. Brazil needs to increase infrastructure investment in order to further improve its economic and social performance.

For instance. and analysis. In 2008. and • leverage borrowing by using the land-based instruments so the total fiscal space created per R$ (Brazilian currency=real) of borrowing is high. land-based financing is not a practical or desirable way to pay for the entire capital budget. • prepare efficient and equitable investment plans and capital budgets. Brazil’s Federal Constitution of 1988 grants municipalities the power to define and use such land-based instruments.257 of 2001. see Vetter and Vetter (2011). • impact fees for new developments. 10. including our composite indicators (OECD 2008). a new instrument being used to revitalize the Nova Luz neighborhood in São Paulo. known as Urban Development Act or City Statute (Estatuto da Cidade). • sale of development rights. In this case they add flexibility to financing decisions and reduce the need for long-term credit. data. • land readjustment (e. To lay the foundation for modern credit markets. Municipalities could further increase their fiscal space for investment by (1) increasing expenditure efficiency.g. what is the potential of these municipalities to create fiscal space to finance infrastructure and other needed investments? Methodology and Analysis To address these questions. • sale of underused public land and buildings. we generated a municipal database that includes the indicators typically used by credit rating agencies and other financial institutions to assess municipal creditworthiness. In other words. and (3) using other land-based instruments that would not involve municipal borrowing. because cities of that size are more likely to have the will and administrative capacity to increase their fiscal effort. • betterment levies. especially when the revenues accrue before the investment is made. consórios urbanos). as this would provide incentives to further improve or at least maintain their financial performance. credit would be granted to those municipalities that • are most creditworthy. To assess the feasibility of such a strategy.40.000 or more held over 65 percent of Brazil’s total population.. and • urban concessions (concessão urbana). The guidelines were subsequently regulated by Federal Law No. indicators. This database enables us to rank municipalities by their performance on any of the indicators and to analyze relationships among variables using correlation analysis or other methods. According to Peterson (2009). (2) increasing revenue through more effective administration of the real estate property and transfer taxes and fees. For more details on the methodology.3 percent of Brazil’s total public sector investment in 2008 (Afonso and Junqueira 2009a). Incentives to Generate Fiscal Space The municipal development strategy recommended by the World Bank (2006) gives priority to establishing a sustainable market-based subnational credit system and providing assistance to municipalities to become creditworthy within a framework of continued fiscal discipline. We excluded 66 municipalities due • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 15 OCTOBER 2011 . as well as other ownsource revenues. we ask: How many Brazilian municipalities would be judged creditworthy by national and international creditworthiness standards? How fully are they using their real estate taxes and fees? What are their investment levels? Have they passed the legislation necessary to fully utilize the land-based instruments that help create and capture real estate value? In other words. In Brazil. A first step in develop- ing such a strategy could be to change the way the national credit allowances for different municipal programs are distributed among municipalities by the federal government. the 584 municipalities with populations of 50. None of these instruments involve public sector borrowing and therefore would not increase the public sector debt or be covered by the restrictions on borrowing by or lending to municipalities. a modified national credit program could provide incentives to create fiscal space by imposing performance conditions. The municipalities selected for study are those with at least 50. Table 1 shows the indicators and the methods used to generate them.000 inhabitants in 2008. these land-based instruments include: • real estate property and transfer taxes. but it has significant advantages as part of the mix of capital financing. land-based financing could create fiscal space for investment without increasing municipal deficits or debt. which is often difficult to obtain in developing countries. such as the sale of development rights and underutilized land.

F E A T U R E Land-Based Financing for Brazil’s Municipalities TA B L E 1 Financial Performance and Other Indicators Used in Analyzing Brazil’s Municipalities Type Creditworthiness Financial Performance Score Financial Performance Rank Economic Potential Benchmark Ranking Ranking Meets 5 different financial performance indicators (if yes=1.based instruments of the Statute of the City (if yes=1. if no= 0) Ranks on 5 financial performance indicators Ranks on 4 economic indicators: Total size of municipal GDP 2007. STN 2008): Financial Performance Score and Financial Performance Rank.0% < 30. relative change of GDP 2002–2007. This is the definition of extreme poverty (indigente). These indicators are used to judge municipal 16 LINCOLN INSTITUTE OF LAND POLICY capacity to generate fiscal surpluses and service additional debt. Ranking Ranking Sum of 8 binary variables Based on employment. education. show how effectively or efficiently the resources are employed.4 percent of the municipalities met the criteria. where only 83. The best overall performance is shown in the Total Debt Service/Net Current Revenue (NCR) Indicator. some are much more creditworthy than others.5% < 75. in which 1. Municipal Financial Performance Indicators We developed two composite indicators of municipal financial performance using data from the National Secretary of the Treasury (Secretaria do Tesouro Nacional.0. • Land Lines • O C T O B E R 2 0 1 1 . and health indicators % of population Population below the Poverty Line Percentage to incomplete financial data. of course.0 would be the highest development level. leaving a final sample of 518 municipalities. where 99.8 percent of municipalities spent less than 11. and GDP per capita 2007 Defined in the text using the financial performance and economic potential indicators Sum of 5 binary variables Average ranking Average ranking on the 4 indicators Ranking Normalization of Criteria Basic Indicators Used Indicator/ Aggregation Creditworthiness Financial Performance Indicators Total Debt Service/Net Current Revenue (NCR) Total Debt Stock/NCR Operating Surplus/NCR Total Debt Service/ Operating Surplus Personnel Expenditures/NCR Other Indicators Investment Total Real Estate Taxes and Fees (TRE) Passage of Land-Based legislation Municipal Human Development Index (IFDM) Ranking < 11. % of populations in households with income per capita of one quarter of a minimum salary or less. IFDM varies between 0 and 1. The first part of the analysis deals with this sample and the second part focuses on 130 municipalities that ranked in the top quartile on the Creditworthiness Indicator.0% > 10.5 percent of NCR on debt service. Passage of 8 laws needed to use the land. Most of the 518 municipalities in the sample (68 percent) meet all five financial performance criteria. if no= 0) Annual indicator of municipal human development (IFDM) that is similar to the UNDP’s Human Development Index (HDI). income. but do not.0% Estimated with financial data from STN data Same as above Same as above Same as above Same as above None None None None None Ranking Ranking Benchmark Ranking Municipal investment in plant and equipment as a percentage of municipal GDP Total revenue from the urban real estate property and transfer taxes (IPTU and ITBI) and betterment fees. absolute change in GDP 2002–2007. The worst overall performance was on Personnel Expenditures/NCR.0% < 54. Among the municipalities meeting all five criteria.

a program initially focusing on the most creditworthy municipalities would not be as regressive as it might seem. Creditworthiness We developed the municipal Creditworthiness Indicator in two steps. thereby rewarding responsible financial performance.0% 35.0% 25.3 million and US$346 billion. The wide dispersion of observaFIGURE 1 tions shows that there is a great deal of diversity (i. Analysis of Top Ranking Municipalities To develop a national program that would provide incentives in the form of access to credit for creation of fiscal space.0% OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 17 ..0% 15. In fact. this scattergram shows that many municipalities ranking in the bottom half in terms of the human development index rank in the top half in terms of their creditworthiness. First.0% 30. we wanted to identify municipalities ranking in the top quartile on the Creditworthiness Indicator.. As the Creditworthiness Indicator is not as highly correlated with the IFDM as might be expected.7 percent of the total Financial Performance Indicators for Municipalities Ranked in the Top Two Quartiles on Creditworthiness Total Debt Service/NCR 2nd quartile 1st quartile Total sample Total Debt Stock/NCR Operating Surplus/NCR Total Debt Service/ Operating Surplus Personnel Expenditures/ NCR 0.e. Municipal Human Development Index and Creditworthiness Figure 2 shows a low correlation between the Creditworthiness Indicator and Municipal Human Development Index (IFDM). The total 2008 population and 2007 GDP of the 130 municipalities in the top quartile were 32.0% 20. Such a program would stimulate investment in municipalities with a relatively high potential for future economic development and superior financial performance.0% % of Net Current Revenue (NCR) 40. These municipalities held 27. Then we calculated the average rank of the two scores. Figure 1 shows that even the municipalities ranking in the second quartile on creditworthiness demonstrate relatively good performance on all five financial performance indicators by national and international standards. with the most favorable performance receiving a rank of 518 and the least favorable a rank of 1. Brazil’s fiscal federal system already includes many automatic transfers to municipalities that are based on population and other criteria rather than on financial performance or creditworthiness.0% 10. respectively.To generate the Financial Performance Rank. we selected municipalities in the top three quartiles on the Economic Potential Indicator with a Financial Performance Score of five (i. we ranked them on the average of all five criteria. meet all five financial criteria). low correlation and high variance) among Brazil’s municipalities with regard to creditworthiness and human development.0% 5.e.0% 45.0% 50.

6 percent) passed all eight laws needed to fully utilize the land-based fiscal instruments permitted by the Statute of the City. Bahl and Martinez-Vazquez (2007) estimated the average real estate property tax (TRE)/GDP ratio for developing countries in their sample to be 0. Summary and Policy Implications This analysis of municipalities ranking in the top quartile by the Creditworthiness Indicator shows that they often invest at low levels..F E A T U R E Land-Based Financing for Brazil’s Municipalities FIGURE 2 Relationship Between the Creditworthiness Rank and Municipal Human Development Indicator (IFDM) for Municipalities Ranking in the Top Half on Creditworthiness Median IFDM = 0. there seems to be much room for increased use of these instruments.g. Municipal Investment and Performance on the Real Estate Taxes and Fees For the top ranked municipalities. Faria Lima and Água Espraiada). It would be interesting to analyze why these few municipalities were willing and able to use betterment levies so much more effectively than most others in the sample.6 percent for all municipalities in the top quartile would increase total annual municipal revenue by over US$700 million. only 32 of the 130 municipalities (24.6 percent up to this level would involve an average annual per capita TRE increase 18 LINCOLN INSTITUTE OF LAND POLICY Enactment of Land-Based Legislation According to the annual survey of municipalities by the Brazilian Institute of Geography and Statistics (IBGE 2009). Betterment levies account for only 0.80 Socio-economic Index (IFDM) 0. and have not passed all of the legislation necessary to use the land-based instruments.00 of only about US$24.01). the top 20 municipalities ranked by total revenue from betterment levies had collected between US$473. and 43 municipalities (33 percent) had passed four or fewer laws.6 percent level could also increase their fiscal effort. one could argue that there is room for more fiscal effort with respect to real estate taxes and fees by municipalities in this top quartile. demonstrate low fiscal effort on real estate taxes and fees. Based on these results.40 0. municipalities with TRE revenues above this 0. For these 20 municipalities. 31.90 1.03 percent and is not correlated with the Creditworthiness Indicator (Spearman correlation = -0.000 and US$2.7 percent of its GDP. with an average collection of US$928. and 21.50 0. Simulations also indicate that relatively small increases in fiscal effort on real estate taxes and fees could generate • Land Lines • O C T O B E R 2 0 1 1 .6 percent in 2000. these levies represented on average more than 10 percent of total municipal investment. but the average levy as a percent of GDP was only 0.000.4 percent of TRE for all of the municipalities in the sample.9 percent of the total population living below the poverty line.34 percent level indicating how much additional fiscal space might be available. median investment as a percentage of municipal GDP is 1.70 0.6 million in 2008. Bringing all the municipalities below 0. Half of the municipalities in this top creditworthiness quartile had TRE/GDP median ratios below the observed low 0.76 Rank: Bottom Half IFDM Rank: Top Half IFDM 500 Rank: Creditworthiness 450 400 350 300 250 0. that is about a 20 percent increase over this median investment level. Since passage of such legislation could create additional fiscal space for municipal investment without increasing municipal debt or deficits. However. Our simulation shows that raising TRE/GDP to 0.18 percent. Obviously. Sandroni (2011) estimated the total revenue for the City of São Paulo from the single law that allows charges for the sale of additional development rights (Outoga Onerosa do Direito de Construir– OODC) to be over US$300 million for the 2006– 2010 period. population in the full sample. Bringing all municipalities now below the median up to 1 percent of municipal GDP would increase total annual municipal investment by US$750 million for this top quartile.60 0. This total excludes the more than US$1 billion from the municipality’s 13 urban development operations financed by selling development rights (e.

collection systems.tesouro. . G. . 2009b. . 36624-BR.pdf Bahl.gov. 2007. Continuing the estimates of residential capital at the municipal level for this database using the hedonic price method with the 2010 Census data would be most useful. Land Lines 23(3): 14–19. technical assistance could be available within the program. Brazil. . fazenda. The program also could encourage municipalities to recognize that effectively planning interventions (public works and land use regulations) can significantly increase land values that then can be captured in part by using the available land-base instruments. . DC: World Bank and Public-Private Infrastructure Advisory Facility (PPIAF). . . Secretaria do Tesouro Nacional (STN). .com. In summary. . .gov. .br/secretarias/upload/Arquivos/seain/Investimentos_ InfraEstrutura_ParteI. . . . .pdf Sandroni. http://www-wds. . . Could land-based financing help create fiscal space for investment by Brazil’s municipalities? Working Paper. Perfil e evolução das finanças municipais: 1998–2007. Brasília: STN. and improved valuations).. . . . DC: World Bank. Washington.ppiaf. Contact: vetterdav@aol. . P. Recent experience with land value capture in São Paulo. Unlocking land values to finance urban infrastructure. Brazil: How to revitalize infrastructure investments in Brazil: Public policies for better private participation.significant fiscal space for municipal investment or other priorities. . .com. . . . . and they could provide subsidies for housing lower-income families. .. The property tax in developing countries: Current practice and prospects. . World Bank. 2006. http://www.htm IBGE (Brazilian Institute of Geography and Statistics).pdf Peterson. . better cadastres. . . http://www. http://www. Revista de Administração Municipal 55(272): 18–25. and J.br/home/estatistica/ economia/perfilmunic/2008/munic2008.. . 2009. planejamento. Heller. DC: World Bank. Brazil: Inputs for a strategy for cities: A contribution with a focus on cities and municipalities. http://www. . Junqueira. .org/external/ default/main?pagePK=64193027&piPK=64187937&theSitePK=523679& menuPK=64187510&searchMenuPK=64187283&theSitePK=523679& entityID=000090341_20061205145849&searchMenuPK=64187283& theSitePK=523679 ———. P. . . . . In short. .e. . . . DAVID MICHAEL VETTER has worked for nearly four decades on urban finance and economics issues in public and private sectors in Latin America. MA: Lincoln Institute of Land Policy. . Private Sector. . . . Afonso. a national program could provide incentives for municipalities to increase their fiscal space for investment and other priorities. .br/attachments/article/1153/FMI.ibge.asp Vetter. Vetter. Martinez-Vazquez. . 2011. the development plan for the new beltway in Rio de Janeiro includes major strategic public and private sector investments of more than US$30 billion. MA: Lincoln Institute of Land Policy. Finance and Development 42(2). R. Report No. . http://www. Contact: marcivt@aol. AB O U T TH E AU TH O R S . .imf. . . Working Paper. . Washington. For example. . . Cambridge.com MARCIA VETTER has worked as a consultant with multilateral and multinational organizations and financial corporations in the United States and Brazil.org/external/pubs/ft/ fandd/2005/06/basics. R. . 2007. 2011. . and put the land-based instruments into operation. such a program could help finance a brighter future for Brazil’s municipalities. . Finance. attain the benchmarks discussed above). A baixa taxa de investimento público Brasileira comparada a dos demais paises em desenvolvimento. Back to basics—Fiscal space: What it is and how to get it. . Handbook on constructing composite indicators: Methodology and user guide.. Unpublished technical note. . . and G. This research demonstrates the utility of a database combining municipal financial and socioeconomic indicators to improve municipal financial performance. including major petrochemical (COMPERJ) and steel facilities already being implemented. . D. . . Perfil dos muncipios brasileiros. prepare and execute effective capital budgets. Additional real estate value will be created in future years as Brazil’s municipalities grow and provide new infrastructure. .joserobertoafonso. Periodic publication of such a database could complement the information that STN currently provides and facilitate future research and policy analysis. 2008.org/dataoecd/37/42/42495745. . http://www. Such projects are likely to generate value that could be captured in part by the land-based instruments to help finance infrastructure.br/ attachments/article/1216/IBAM.org/ppiaf/sites/ppiaf. and M. . . . . . 2008. Investimento público no Brasil é mais municipal que federal.br/estados_municipios/index. Such a program could be open to all municipalities that meet the creditworthiness criteria and have an acceptable capital budget (i. and Infrastructure Management Unit. Volume I: Main Report No.pdf ———. E. . http:// www. Paris: OECD. . 2009. 2008. .pdf OECD (Organisation for Economic Co-operation and Development).gov. including help to improve collection of real estate taxes and fees (e. 2005. . . http://www. . Rio de Janeiro: IBAM.pdf OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 19 . . 2009a.joserobertoafonso.worldbank. . Latin America and the Caribbean Region. .oecd. we argue that a national program allocating at least part of the annual allotment of municipal credit based on performance criteria could provide incentives for increased generation of municipal fiscal space while maintaining fiscal discipline. 35749-BR. To help all municipalities become eligible. M. . . Washington. H.org/files/ publication/Trends%20Policy%20Options-7-Unlocking%20Land%20 Values%20-GPeterson. . Cambridge. J. .g.. . . . Based on these findings. .com R EFER EN C ES . .

two components that typically constitute the tax bases of state and local government. Public colleges and universities educate three-quarters of students enrolled in degree-granting institutions. Capital gains. while GDP fell by about 5 percent. and over the next several years it declined further and more sharply than it had in any other recession since World War II (figure 1). The unemployment rate rose to 10. falling for five consecutive quarters beginning in the fourth quarter of 2008 and continuing through 2009.Donald Boyd he recent recession has been recognized as the worst in memory.1 percent after two years of recovery. these measures do not tell the whole story. In fact. there is no reduction in the numbers of children in school or elderly people in nursing homes—two of the most important spending areas for state and local governments—or in the numbers of fires or crimes. Even if states can avoid these challenges. and its effects are still being felt. falling only to 9. When a recession hits. it will be a long. Taxable consumption fell by about 11 percent. The recent drop in GDP has been significant in comparison to past recessions. reflecting the jobless recovery. They finance more than 90 percent of K-12 education and deliver virtually all of it. and new revenue demands may overwhelm any interim improvements in collections.1 percent and has remained stubbornly high. These gains have increased in importance and are a major cause of increased volatility in state finances. with several large risks along the way. State tax collections plummeted. Even though this has been the worst post-war recession by traditional economic measures. demand for the kinds of services that state and local governments provide typically rises during recessions.8 percent in the second quarter of 2009. and build more than 90 percent of the nation’s public infrastructure. driving down tax collections in the final quarter of the 2009 fiscal year. • Land Lines • O C T O B E R 2 0 1 1 . when tax returns reflecting the 2008 stock market collapse were filed. are not included in personal income as measured in the nation’s economic accounts. For programs such as Medicaid and higher education. slow road to fiscal recovery. The services financed and delivered by state and local governments tend to have stable and generally rising demand. they are closer to the bottom of that cliff than the top. They finance much of the nation’s social safety net and implement much of it as well. have been far worse. While state government finances have stopped falling off a cliff. Decline in State Tax Collections The Great Recession that started in December 2007 was the deepest and longest recession since the Great Depression of the 1930s. Tax revenue fell by a dizzying 16. for example. State and local governments oversee. an important component of state tax bases. Taxable components of personal income also fell much more sharply than the overall economy and still languish more than 5 percent below the prerecession peak. Tax receipts have not returned to their pre-recession levels. but the declines in taxable consumption and personal income. state and local governments spend more on direct implementation of domestic policy than does the federal government. Unless and until 20 LINCOLN INSTITUTE OF LAND POLICY states can fix their revenue structures or develop adequate reserves. Capital gains fell by more than 55 percent. State and local governments play a major role in the economy and in our daily lives. Less well understood is the fact that this recession has been far worse for state governments than the drop in gross domestic product (GDP) would suggest. design. public policy will continue to gyrate with every turn in the economy.

States are closer to the bottom of the cliff than the top. Figure 2 shows that annual income taxes fell by more than 15 percent in inflation-adjusted terms. Inflation-adjusted state tax revenue for the nation as a whole in the latest four quarters (ending in the first quarter of calendar year 2011) was 7.S. but in the last two quarters tax revenue growth was driven primarily by the improving economy. The heady growth in the first two quarters of 2011 probably cannot be sustained because much of it appears to have been driven by stock market gains in tax year 2010.FIGURE 1 Percent Changes in State Tax Revenue and GDP. boosting income tax returns in the second quarter. long-term debt have contributed to fears of a double-dip recession. The net result of these and other forces was huge declines in state income. There are indications that economic growth will be slower than most states have assumed in their current budgets. Those gains almost certainly will not be repeated in 2011. 1965–2011 18% 15% 12% 9% 6% 3% 0% -3% -6% -9% -12% -15% -18% Real GDP Real state tax revenue Recession 65 67 69 71 73 75 Source: Prepared by the author using data from the U. and are at risk of falling back down.S.8 percent. Property taxes. turmoil in European debt markets and the recent Standard & Poor’s downgrade of U. and revenues OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 21 . there are some signs that local government tax revenue also is beginning to weaken. By the fourth quarter. State tax collections grew in each quarter of calendar year 2010. Meanwhile. although they are beginning to weaken and in some parts of the country have fallen significantly. and 21 states had double-digit growth. and corporate taxes. 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 19 19 19 19 19 19 19 19 77 Preliminary data for the April–June quarter show tax revenue up 11. sales. While tax revenues are now growing in most states compared to the last year’s low collection rates. A Slow Recovery The recession ended in June 2009 and the economy has been recovering slowly. In the first two quarters of 2010.S. remained quite stable through much of the period. In addition. increased tax rates more than offset declines caused by the weak underlying economy. tax revenue grew by 7.7 percent below the peak attained in 2007.0 percent.3 percent compared to the previous year. Bureau of Economic Analysis. but even without tax rate increases it would have grown by 7. After adjusting for inflation.4 percent. Tax revenue in the January–March 2011 quarter grew 9. which are crucial to local governments but generally not a significant revenue source for states. and corporate income taxes fell by more than 25 percent. tax revenues for the latest four quarters are below the calendar year 2007 level in 43 states. Census Bureau and U. and the character of that growth has improved over time. sales taxes fell by more than 10 percent. they have not reached the levels prior to the recession.

slightly recovered condition for private sector employment. The recession also has created other pressures and problems for states by depleting unemployment insurance trust funds. ix). Bureau of Economic Analysis. Education employment is now down about 3. as was the case in the 2001 recession. There are no signs that these cuts are slowing. especially Medicaid.F E A T U R E A Long Road to State Fiscal Reovery FIGURE 2 Varying Trends in Personal Income. Education employment in most states is related primarily to higher education—community colleges. According to the National Association of State Budget Officers (2011. States still face fiscal trouble for four main reasons. but changes in state and local government employment can be tracked. Corporate Income. First. four-year colleges. Medicaid enrollment rose by 8. Meanwhile. and higher education. State government education employment has continued to rise significantly throughout the recession and recovery. reflecting in part the increased demand for higher education that usually comes with recessions (figure 3). state governments have been cutting noneducation employment at an accelerating pace.S. other safety net programs. 22 LINCOLN INSTITUTE OF LAND POLICY Percent difference from start of recession (Dec 2007) . the recession has had lagged fiscal effects. only Oregon (8.8 percent in fiscal year 2012. State and Local Government Responses States hit by falling revenue also face rising entitlement costs driven in large part by Medicaid enrollment.S. It is difficult to measure the impact of spending cuts on state and local programs. Among the seven states showing a positive shift in revenue collection. and in some states it includes part of the K-12 workforce. many people choose to build skills and knowledge by entering an education program or extending their time in school (Betts and McFarland 1995). Although private sector employment fell sharply from the beginning of the recession. When jobs are hard to find. which typically increases after unemployed workers exhaust health insurance benefits.1 percent in fiscal year 2010. so that it is now down almost 5 percent from its mid-2008 peak. and by an estimated 5. which are being hit increasingly hard by slowing property taxes and cuts in state aid. Local government employment is now about 3 percent below its peak. nearly comparable to the current.4 percent in fiscal year 2011. which may lead to higher unemployment insurances taxes in order to repay federal loans. These and other types of required expenditures cause further stress in the day-to-day operations of state and local governments. state and local government employment continued to rise modestly for about a year and a half. In each of the nine previous recessions. and the noneducation sector is down about the same percentage from its peak. are 10 percent or more below that level in 20 of those states. Sales. and states and localities have been cutting employment aggressively. Figure 4 shows the same employment data for local governments. and North Dakota (62. state government noneducation employment either did not decline at all or it declined by much less. driving up the demand for many government services. and little reason to believe they will abate in the near term.5 percent from its late-2008 peak. Continuing Fiscal Pressures The recent improvement in state tax revenue is welcome. Shortly before private sector employment reached its nadir. Delaware (13 percent). and state government employment is about 2 percent below its peak. total revenue remains well below its peak. but many challenges remain. and Property Taxes During and After the Recession 5 0 -5 -10 -15 -20 -25 Personal Income Sales Corporate Income Property 2008 2009 2010 2011 Source: Prepared by the author using data from the U.9 percent). states project a further increase of 3. Census Bureau and U. state and local government employment began to • Land Lines • O C T O B E R 2 0 1 1 decline. and universities—although some is related to the administrative bureaucracy for elementary and secondary education. Second.9 percent) are at levels above 2 percent.

Working Paper. Donald. Smith.... 2011)....org/Publications/FiscalSurvey/ tabid/65/Default. Sisko.. Cambridge.. Unless and until states broaden their tax bases to make their revenue structures less volatile. • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 23 . National health spending projections through 2020: Economic recovery and reform drive faster spending growth.. state cyclical adjustments are not yet complete because they must contend with losses in both federal stimulus aid of more than $50 billion in fiscal year 2011–12 and the fact that temporary revenue measures put in place in response to the recession will expire soon... FIGURE 4 Local Government Employment Trends During and After the Recession Percent difference from start of recession (Dec 2007) 1 0 -1 -2 -3 Source: Prepared by the author using data from the U. FIGURE 3 State Government Employment Trends During and After the Recession 3 2 1 0 -1 -2 -3 -4 State government State government education State government excluding education DONALD BOYD is the executive director of the national Task Force on the State Budget Crisis. Safe port in a storm: The impact of labor market conditions on community college enrollments. Cuckler. 2011. Truffer.. McFarland.. public policy will continue to gyrate with every turn in the economy. and. Andrew J... OCTOBER 2011 De c ’ M 07 ar Ju ’08 n ’0 Se 8 p De ’08 c ’ M 08 ar Ju ’09 n ’0 Se 9 p ’ De 09 c ’ M 09 ar Ju ’10 n ’0 Se 9 p De ’09 c ’ M 10 ar ’ Ju 11 n ’1 Se 1 p ’1 1 De c ’ M 07 ar Ju ’08 n ’0 Se 8 p De ’08 c ’ M 08 ar Ju ’09 n ’0 Se 9 p ’ De 09 c ’0 M 9 ar Ju ’10 n ’0 Se 9 p De ’09 c ’ M 10 ar ’ Ju 11 n ’1 Se 1 p ’1 1 Local government Local government education Local government excluding education AB O U T T HE AUT HOR .. cochaired by former Federal Reserve Board chairman Paul Volcker and former New York lieutenant governor Richard Ravitch.. States finance these services with unstable revenue sources..... the likelihood that health care costs will continue to rise more quickly than the overall rate of economic growth (Keehan et al. reflecting in large part the increasing role of volatile capital gains taxes.. DC. Betts. states will have to contend with large increases in pension contributions and payments for retiree health care—a pressure that is likely to build for years to come for several reasons... Boyd is currently on leave from his responsibilities as senior fellow at the Rockefeller Institute of Government. Poisal.. even after this cycle is fully stabilized.. Journal of Human Resources 30(4):741–765.. MA: Lincoln Institute of Land Policy.. Bureau of Labor Statistics. Bureau of Labor Statistics. Health Affairs 30(8): 1594–1605. and Sheila D. Fourth.. Christopher .... and Laurel L.. 2011.. Boyd.. or develop adequate reserves... National Association of State Budget Officers...Percent difference from start of recession (Dec 2007) Third..com R E FE R E N CE S . 1995.. http://nasbo... 2011.... and state and local finances.S.. Joseph M. Recession. including: increasing numbers of retirements by an aging workforce..... J.. Washington.... John A.... Gigi A.. Keehan.... years of chronic underfunding. Julian R. and tax revenue has become much less dependable over the last two decades.....aspx Source: Prepared by the author using data from the U. where he conducts research on state and local government fiscal issues..S.. The fiscal survey of states.... Sean P Andrea M. Contact: donboyd5@gmail. Lizonitz.. recovery. in the case of some pension systems and most retiree health plans. Madison.

property and land taxes. and William Wheaton. Follain LAND LINES: How were you introduced to the Lincoln Institute? JAMES FOLLAIN: My involvement with the Lincoln Institute has spanned 30 years and James Follain is an economist with extensive experience in the analysis of housing and mortgage markets. a financial services firm headed by his son. Early in my career I had the opportunity to work closely with Greg when he led the World Bank City Study project in Bogotá. and others. John Kain. I became a Weimer Fellow in 1991 and currently serve on the faculty. LAND LINES: What are some other highlights of your work with the Institute? JAMES FOLLAIN: In 1988 I participated in the annual TRED Conference that for many years was held at the Institute’s offices in Cambridge and focused on various aspects of taxation. from the University of San Francisco. we used the data set assembled by Greg’s team. and a former student. and the Lincoln Institute of Land Policy. and economic development.F E A T U R E Property Taxation and Informality Faculty Profile James R. One of the outputs of that larger research project was a book. Follain is also a senior fellow at the Nelson A. He is currently the principal of James R.com. when we were both on the faculty of the Maxwell School of Citizenship and Public Affairs at Syracuse University in New York. edited by Roy Bahl and published by the Institute in 1991. Kerry Vandell. in economics from the University of California at Davis and his B.S. Ingram. Contact: jfollain@nycap. During that 2010 meeting Greg and I initiated a conversation about our common interest in investigating what is different and important about the most recent house price bubble-bust. LAND LINES: How did you become involved with the Lincoln Institute more recently? JAMES FOLLAIN: I reconnected with Greg at the 2010 meetings of the Weimer School when he was honored as a Halbert C. which was quite unusual at that time for the kinds of hedonic price index studies we were doing in the United States or elsewhere. The Jamaican Tax Reform. The broad topic of the work and the project was also at the frontier and dealt with ways in which squatter settlements could be improved to become better homes for their residents.rr. which was titled “Interactions between Finance and Urban Development. He received his Ph. He has conducted research on the risks of mortgage lending. Steve Malpezzi. Patric Hendershott. and the current mortgage crisis.A. LAND LINES: I understand you also have worked with Gregory K. Mills and I later coedited a special issue of the AREUEA Journal (1989) based on the six papers and discussant comments presented at that conference. suburbanization.D. now a Regents Professor of Economics and Founding Dean of the Andrew Young School of Policy Studies at Georgia State University. the Weimer School is a unique and effective forum for fostering academic work that improves the quality of decision making in real estate and land economics. I remember. Follain was a tenured professor of economics at Syracuse University from 1988 to 1998 and also worked with various business. and an advisor to FI Consulting. the Institute’s current president and CEO. but some information is available at the GSU Web site. Roman Iwachiw. the Massachusetts Attorney General’s Office. and I was fortunate to participate in a study of the country’s land tax with Professor Daniel Holland of Massachusetts Institute of Technology. In a paper on housing characteristics in developing countries (Follain and Jimenez 1985). Established in 1982. resources. The book is now out of print. He has authored and coauthored numerous publications for academic and broader audiences and served as the president of the American Real Estate and Urban Economics Association (AREUEA) in 1988. Smith Honorary Fellow at the Weimer School/ Homer Hoyt Institute in Florida. the tax treatment of housing. having access to data with geo-coded locational coordinates. 24 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 . government. mortgage choice. who also has a long affiliation with the Lincoln Institute. whose recent contracts have been with the U. John Quigley. introduced me to the Institute in the early 1980s. Tom. Greg and his team collected data that were used in a number of studies that I coauthored with Emmanuel Jimenez. Follain LLC. We worked together on a major study of tax reform in Jamaica. Rudolph Penner. as well as people relatively new to the profession who have gone on to become leaders such as David Geltner and Dan Quan. Prior to the establishment of the LLC and his move to the Capital Region of Albany.” The participants included many public finance economists including Karl Case. We host two meetings per year to discuss recent research by new and current fellows and to recognize others who are working on related topics. that’s correct. Department of Housing and Urban Development. JAMES FOLLAIN: Yes. has provided me with the opportunity to meet many top people in the field of public finance. Colombia. This discussion continued for some time and led to my involvement in a research project sponsored by the Lincoln Institute. and policyoriented organizations. Roy Bahl. for example. Rockefeller Institute of Government at the University of Albany/SUNY. Professor Edwin S.

indicating that one country can learn from another’s housing policy experiences..html policy implications of this research on housing bubbles? JAMES FOLLAIN: One has to do with the development of policies by the Federal Reserve Board and other agencies to combat house price bubbles before they bust. My concerns are twofold.gsu. MA: Lincoln Institute of Land Policy... 1985.. The demand for housing characteristics in developing countries. A look at U. The spatial distribution of development.. These similarities carry over to many housing market outcomes. the number of sales available that can be used to value properties is greatly diminished. Andrew Young School of Policy Studies.. GA: Georgia State University. declining central densities. one of the key results of empirical work on urban economics over the past few decades is the similarity of findings across large cities in different regions. which can reduce the precision of assessments and increase horizontal inequities.. In my article about declining cities. 2011. Atlanta. Freddie Mac. in coming to grips with the risk of extreme and difficultto-predict events. http://www.S. Full recovery in these places will take many years since house price levels at their peak reflected wildly exaggerated expectations of future growth. entitled “A Look at U. House Price Bubbles from 1980–2010 and the Role of Local Market Conditions. Follain..LAND LINES: What research are you working JAMES FOLLAIN: I think so. and can you share some experiences as a housing policy analyst in Washington? JAMES FOLLAIN: I was attracted by the possibility of working within an institution.htm.. I discuss what I refer to as “emerging declining cities” because the current housing stock may exceed what future demand will support. property values have declined in many areas and reduced the value of the tax base... The first part of my time with Freddie focused on the affordable housing goals it was mandated to achieve. I have written a couple of case studies using data from New York State and I am in the process of developing a larger project on the topic. LAND LINES: What are some of the potential on house price bubbles is enormous and includes many recent papers about conditions in China and Europe.. 2011. California. especially large financial institutions. Jamaica tax structure examination project (1983– 1987). Using Monte Carlo simulations to establish a new house price stress test. Washington. My sense is that the Fed understands the limits of standard monetary policy for this purpose. Our findings support and champion a theme quite consistent with those supported by the Lincoln Institute over the years—the importance of recognizing the wide variability of housing markets and the role of local conditions.. International Studies Program. One key insight has to do with the challenges faced by both individuals and corporations.. A study of real estate markets in declining cities.. I testified before Congress in late 2005 and have written about some of these experiences. coauthored with Seth Giertz of the University of Nebraska.” was just published in the Journal of Housing Economics. R EFER EN C ES . LAND LINES: What prompted you to move from academia to policy making.. We are currently moving forward on two new projects sponsored by the Lincoln Institute that focus on the most recent house price bubble and bust period. Follain. Florida. It is in the process of considering a wider array of macroprudential tools that might be used for this purpose. It began with publication of a paper supported by the Research Institute for Housing America entitled “A Study of Real Estate Markets in Declining Cities. LAND LINES: What is your view about the likely pace and character of the housing market recovery after the recent decline in prices and construction activity? JAMES FOLLAIN: I emphasize in my recent research that house prices have declined dramatically during the past five years in many parts of the country. house price bubbles from 1980–2010 and the role of local market conditions. 2011. with a dual mission to expand the securitization of mortgages and access to credit to low.S. My most recent assignment with the Lincoln Institute of Land Policy has resulted in a Lincoln Institute working paper. Follain... Cambridge... and determinants of travel and mode choice show consistent results across large cities in the world. Giertz. The literature on currently? JAMES FOLLAIN: This has been a most interesting year for me. decentralization of employment and residences. James R. LAND LINES: Is this work likely to be useful and relevant to housing market policy in other countries? OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 25 .. using data from the past decade.” We explored a variety of models to explain house price growth at the MSA level over the three decades since 1980. In addition.and moderate-income households.. First. Second. and Nevada..housing america. James R. These declines may well be justifiable for those areas particularly hard hit by the crisis such as Arizona. ———. entitled “Using Monte Carlo Simulations to Establish a New House Price Stress Test.. wiping out massive amounts of wealth among homeowners and lenders. also coauthored with Seth Giertz. James R.. Georgia State University. DC: Research Institute for Housing America. Journal of Housing Economics 20(2): 101–119.. The tool that I have in mind is one that I have written about and championed in earlier times—geographical variations in the pricing of mortgage credit risk that take account of local housing market conditions. The latter part focused on the development of capital rules for the credit risk embodied in the mortgages included in its securities.. as evidenced by the growing literature on this topic. LAND LINES: How does your work at the Rockefeller Institute relate to these investigations? JAMES FOLLAIN: My current focus there is on the impact of the Great Recession and the house price bubble-bust cycle on local property taxes.” A second paper.. Working Paper.edu/isp/3619. I moved to the Federal Reserve Board in 2003 to continue work on capital adequacy for large financial banks that invest in residential mortgages.. 2011. http://aysps.org/Publications/AStudyof RealEstateMarketsinDecliningCities. and Emmanuel Jimenez. Urban Studies 22(5): 421–432. and Seth H.

Such sources could include increasing existing transportation-related fees (such as a portion of the gas tax or ticket surcharges). and California H High-Speed Rail: International Lessons for U. Over the past 50 years. transportation spending has favored the development of interstate highway and aviation systems. Policy Makers igh-speed rail has been adopted throughout the world. Daniel Schned. North Carolina.. it can learn from the experiences of other countries in planning.. and Germany have been investing in modern high-speed rail systems to satisfy the travel demands of current and future generations.... and attracting visitor spending.. carrying the momentum of this initial investment forward has proven to be a struggle in a difficult fiscal environment.. Contact: Lane@rpa.S. In general. However. a national urban planning initiative based at the Regional Plan Association to develop a U.00 ISBN: 978-1-55844-222-1 Policy Focus Report / Code PF029 Ordering Information Contact Lincoln Institute at www. Japan. boosting productivity of knowledge workers. Petra Todorovich is director of America 2050. Those states that had the staff capacity.. and expanding existing credit assistance programs. highspeed rail can promote urban regeneration and attract commercial development. expanding labor markets.. constructing. economic. high-speed rail promotes economic growth by improving market access. expertise... Policy Makers Petra Todorovich.S. • Strengthen the federal policy and management framework by expanding the federal role in planning and prioritizing high-speed rail corridors and working with the states to secure rightsof-way... state. U.. While it requires high upfront investment. after years of minimal federal investment. Contact: DSchned@rpa. Decades of international experiences with high-speed rail suggests that it could create similar transportation. as shown in several European examples.. • Secure adequate and reliable funding by drawing on a full complement of potential federal. and Washington. and experience in rail planning. forging public-private partnerships. In the meantime. Spain. This report describes several funding strategies that have proven to be successful in other countries... by addressing the management and financing challenges each region faces. France. High-speed rail has greater operating energy efficiency than competing modes and takes up less land than highways. As the United States embarks on the High-Speed Intercity Passenger Rail (HSIPR) Program begun in 2009..edu is currently the only federally funded Core Express high-speed rail project moving forward.org 26 LINCOLN INSTITUTE OF LAND POLICY • Land Lines • O C T O B E R 2 0 1 1 ... required that the federal government and participating states quickly scale up to the challenge of laying the groundwork for a foundational program and implementing it at the same time.1 billion in the HSIPR Program. and private sources.. and makes specific policy recommendations to better position the federal high-speed rail program for success. Contact: Petra@rpa. well-connected stations in center-city locations offer the greatest potential for urban revitalization.. and Robert Lane 2011 / 60 pages / Paper / $15.S.lincolninst. and is now being planned and developed in the United States. infrastructure and growth strategy. Congress voted to strip funding from the program. • Focus initially on the Northeast Corridor and California..org Robert Lane is senior fellow for urban design at Regional Plan Association and a founding principal of Plan & Process LLP. countries such as China... and operating high-speed rail. and safety benefits in American cities and regions. AB O U T TH E AU TH O R S . which offer the best opportunities for Core Express high-speed rail service in the United States. where he researches high-speed and conventional passenger rail in the Northeast Corridor.. • Prioritize corridors that meet investment criteria by clarifying the objectives and desired outcomes of the federal program and promoting investments in those corridors that exhibit the characteristics that are indicative of success.. environmental.. When planned thoughtfully with complementary investments in the public realm.New Lincoln Institute Policy Focus Report High-Speed Rail: International Lessons for U. • Establish new mechanisms for corridor management by developing legislation that enables the creation of public infrastructure corporations that can operate across state and national borders and attract private investment. creating an infrastructure bank.... such as Illinois. In 2011. were successful in securing high-speed rail grants.S. • Plan for maximum land development benefits by coupling high-speed rail station investments with policies that encourage land development around station areas. The initial investment of $10.. The expiration of the legislation authorizing the highspeed rail program in 2013 may provide an opportunity to consider policy changes.org Daniel Schned is an associate planner for America 2050 at Regional Plan Association..

Property Creation by Regulation: Rights to Clean Air and Rights to Pollute.. McDowell Commentary. Andrea G. Gary D. Grossman 4. Schlager 13. Robert C. Semiarid West: Efficiency and Equity Issues. Peter Z.. Reference Levels.. Thráinn Eggertsson 2.edu OCTOBER 2011 • Land Lines • LINCOLN INSTITUTE OF LAND POLICY 27 .. Cole Commentary.edu Elinor Ostrom is the Arthur F. Cole is professor of law and public and environmental affairs at Indiana University.. Shogren and Gregory M.. addresses the tendency in social science literature to oversimplify the concept of property rights by assuming that only two or three forms of property rights are appropriate for the effective use and conservation of resources.edu Property Systems 1. Enclosing the Fishery Commons: From Individuals to Communities. Daniel H. and Valuation Disparity. Climate Change: The Ultimate Tragedy of the Commons? Jouni Paavola Commentary... Zerbe Commentary.lincolninst. The Meaning of Native American Land Ownership: A Study in Psychological Entitlement.. and mechanisms for ameliorating property conflicts that arise from the presence of endangered species on privately owned lands.. The topics addressed in the other chapters and accompanying commentaries include: the nature and variety of existing property systems. Barnes AB O U T TH E ED I TO R S ... evolving property regimes governing fisheries. William Blomquist Commentary. Alston Global Commons Issues 14.. V. Mark T. Kanazawa Air 5. John A. O Wildlife 7. Wallace E.. Edella C. Daniel H.S.... Bonnie J. Who Owns Endangered Species? Jason F. A Political Analysis of Property Rights. Bentley Professor of Political Science and Professor of public and environmental affairs at Indiana University. political science. William A. Nives Dolšak Commentary. Katrina Miriam Wyman Commentary. Contact:ostrom@indiana. Cole and Elinor Ostrom Daniel H. Cole & Elinor Ostrom November 2011 / 544 pages / Paper / $30. Cole and Elinor Ostrom The California Gold Rush 3.. Baden 11. history. Parkhurst Commentary.. McCay Commentary. Anthony Scott Land and Water 9. Water Rights and Markets in the U. The chapters explore the multiple aspects of diverse resources in the design and implementation of property rights systems. where relatively simple and transparent institutions are ideal for identifying social regularities with general applicability. Contact: dancole@indiana. North Introduction. James Wilson 8. Epstein Commentary.. This book. C. Instead it focuses on recent developments in our understanding of how various property systems are applied to and affect the use of scarce natural resources. based on a 2010 Lincoln Institute conference.. Smith 12. Gold Rush Legacy: American Minerals and the Knowledge Economy. Sinking States. Property in Land and Other Resources Edited by Daniel H.. who discusses issues related to property rights institutions and the environment using six case studies from his native Iceland.. Richard A. Oates 6. and law. The Variety of Property Systems and Rights in Natural Resources. Rights to Pollute: Assessment of Tradable Permits for Air Pollution.. The Evolution of Zoning Since the 1980s: The Persistence of Localism. Karen Clay and Gavin Wright Commentary. Shi-Ling Hsu Contents Foreword. Playing by Different Rules? Property Rights in Land and Water. attributes of property regimes governing water resources. Daniel H. North and a keynote chapter by Thráinn Eggertsson. Fischel Commentary. Henry E.. Lee J. Gold Rushes Are All the Same: Labor Rules the Diggings... Kerry Smith 15.. new thinking about the California gold rush. Libecap Commentary. much has been written about property rights in land and natural resources by scholars in many disciplines including economics. Douglass C. The volume also includes a foreword by Douglass C.. Ellickson 10. Opportunities and Limits for the Evolution of Property Rights Institutions.. Richard A. how regulations sometimes create property.. Leigh Anderson and Richard O. the nature of property rights in tradable pollution permits. the role of psychological entitlement in property allocation.New Lincoln Institute Book Property in Land and Other Resources ver the past several years. the evolution of zoning..00 ISBN: 978-1-55844-221-4 Ordering Information Contact Lincoln Institute at www..

lation on Land Prices: The Case of Bando2 in Mexico City 28 LINCOLN INSTITUTE OF LAND POLICY Housing Bubbles and Busts James R. Consult the Lincoln Institute Web site (www. House Price Bubbles from 1980 to 2010 and the Role of Local Market Conditions Christian A. and registration procedures. taxation and assessing officers. Lincoln Institute of Land Policy. planning and development practitioners. Follain LLC. Environmental Protection Agency. Carl Dierker and Rosemary Monahan. For more information. beginning at 12 p. United States Programs MONDAY–THURSDAY. Kenya United States Programs John E. The lectures are presented at Lincoln House. Anderson and Richard F. Elmina B. Massachusetts.lincolninst.m. School of Architecture. Nairobi. Some papers by associates affiliated with the Institute’s Latin America and China programs are also available in Spanish. L. Boston. Dye Are Property Tax Abatements for Business Structures an Indirect form of Land Value Taxation? James R. The programs are free. decentralization. DECEMBER 5–9 Montevideo. 113 Brattle Street. FRIDAY. Portuguese. nonprofit organizations. Washington Lincoln Lecture Series The annual lecture series highlights the work of scholars and practitioners who are involved in research and education programs sponsored by the Lincoln Institute. Anderson. Federal Home Loan Bank of Boston The Urban Gauge: Measuring the Public Interest  George Thrush. including the results of Institute-sponsored research. Lincoln Institute of Land Policy. Ricardo Abramovay. M T levels of government. speakers. Listed below are the papers that have been posted since June 2011 at www. and Baird Family Professor of Economics. James R. policy advisers and analysts. Follain. DECEMBER 1 This forum brings together leaders from government agencies. and the private sector who play a critical role in shaping growth in New England. NOVEMBER 7–11 Caracas. Kingsbury Browne Fellow.edu/education/courses. Latin America Programs MONDAY–FRIDAY. MONDAY-FRIDAY. OCTOBER 11 National Community Land Trust Conference The National CLT Academy is a joint venture of the Lincoln Institute of Land Policy and the National Community Land Trust Network. Venezuela Effective Practice in Funding Land Conservation for Impact Jay Espy. and lecture topics. and Sergio Castelani Urban Evolution in São Paulo: Employment Growth and Industrial Location (also available in Spanish) Evolución urbana en São Paulo: Crecimiento del empleo y ubicación industrial Martím Smolka and Ciro Biderman Housing Informality: An Economist’s Perspective on Urban Planning Durfari Janive Velandia Naranjo and Oscar Sanora Quintero Effects of Urban Density Regu. and Zulma Bolivar. Uruguay Informal Land Markets and Regularization in Latin America Martim Smolka. Giertz A Look at U. providing comprehensive training on theories and practices unique to community land trusts.org. Lincoln Institute of Land Policy. calendar ore than 730 working papers are currently available. NOVEMBER 2 Latin America Programs Danilo Igliori. Lincoln Institute of Land Policy. and occasional reports or papers cosponsored with other organizations. University of Nebraska–Lincoln Topics include international experiences in the management of metropolitan areas.S. Brunswick. For more information about the agenda. business and community leaders.WORKING papers PROGRAM Courses and Conferences he education programs listed here are offered as open enrollment courses for diverse audiences of elected and appointed officials. DECEMBER 14 Management of Metropolitan Areas: The Case of Caracas Martim Smolka. DECEMBER 2 Boston. and the impact of informal settlements. coordination among different • Land Lines • O C T O B E R 2 0 1 1 . Visiting Fellow. Mayor’s Office of the Metropolitan Area and Central University of Venezuela Property Tax Abatements and Land Value Taxation John E. Boston.S. Nelson A. faculty.lincolninst. Massachusetts New England Smart Growth Leadership Forum Armando Carbonell. Follain and Seth H.asp.lincolninst. U. Numerous courses and other programs will be presented during the national conference. course-related materials. and David Parish. and concerned citizens. (lunch is provided). Massachusetts WEDNESDAY. and Senior Fellow. University of Albany. Rockefeller Institute of Government. Cambridge. visit the Lincoln Institute Web site at www. TUESDAY. and Claudio Acioly. United Nations Human Settlements Program. edu/news/lectures.edu/pubs. Dean. or Chinese. New York THURSDAY. UN-Habitat. Hilber The Economic Implications of House Price Capitalization: A Survey of an Emerging Literature Emily Thaden Stable Home Ownership in a Turbulent Economy: Delinquencies and Foreclosures Remain Low in Community Land Trusts Paul Waldhart The Effect of Increasing the Number of Property Tax Payment Installments on the Rate of Property Tax Delinquency This course will examine informality and the land tenure regularization process through the analysis of Latin American and other international cases.asp) for information about other dates. Northeastern University. and Executive Director.cltnetwork. but preregistration is required at the Web site. Principal. OCTOBER 24–27 Seattle. contact the CLT Network at www. scholars and advanced students. Maine WEDNESDAY. Sewall Foundation. Lincoln Institute of Land Policy.

including news on the use. regulation. and taxation of land. share posts with friends. • Land Lines • www. This section includes access to Spanish translations of Land Lines.What’s New on the Web Become a Fan on Facebook Visit www. Fans can view original short videos. and selected books.facebook. A new special feature highlights publications and programs associated with the Program on Latin America and the Caribbean. and learn about research and other information that is continually updated on the Lincoln Institute Web site.lincolninst. Regularization of Informal Settlements in Latin America. is also available in both Spanish (Regularización de asentamientos informales en América Latina) and Portuguese (Regularização de Assentamentos Informais na América Latina).com/lincolninstituteoflandpolicy Enhancements at the Lincoln Institute of Land Policy’s Facebook page provide easy access to exclusive content and regular updates on a wide range of issues related to land policy. The recently published policy focus report. including Perspectivas urbanas: Temas críticos en políticas de suelo en América Latina (Urban Perspectives: Critical Land Policy Themes in Latin America) and a series of publications collected as Catastro e información territorial en América Latina (Cadastres and Land Use Information in Latin America).edu OCTOBER 2011 LINCOLN INSTITUTE OF LAND POLICY 29 . starting with the July 2011 issue.

seminars. Web-based resources and tools. and lists of fellows and faculty. contact help@lincolninst. and evaluation projects.edu ninst edu . It includes department descriptions.Non-Profit Org. MA 02138-3400 USA RETURN SERVICE REQUESTED Boston.edu. and online education programs. www.S. publications and multimedia products.lincolninst. To request a print copy. Postage 113 Brattle Street Cambridge. The complete Program catalog is posted on the Lincoln Institute Web site for free downloading. research. demonstration. 57852 PAID Land Lines OCTOBER 2011 2011–2012 Program The Lincoln Institute’s annual Program for 2011–2012 presents a comprehensive overview of the Institute’s mission and its diverse programs for the new academic year. courses. MA Permit No. conferences. U.

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