Land Value Capture

Land & regulatory framework for

built environment
Assignment - 01

AJU J GEORGE A13558922001

RITESH KURAR A13558922002
MEHUL SARKAR A13558922003
Table of Content
Introduction
1 A. Land value capture in india
B. Types of Land value capture
C. Value capture methods

Legal & regulatory framework for LVC in India

2 A. Analysis of Legal & regulatory framework for LVC in India
B. Identification of new challenges & opportunities

Comparative Analysis of LVC in India

A. Overview of successful land value capture projects in different regions of
3 India
B. Brief of land value capture practices
C. Identification of best practices that can be adapted to Indian context

4 Conclusion
Introduction – Value capturing financing

Recovers the value Raising government

Value capture generated by public raise resources by
financing infrastructure for private tapping increase in
land owners value of land

Creating new
development
Value Creation
opportunities

Investment is turned
Value capture into monetary value

Sharing of gains
Value realisation through agreed
instruments of VCF

Resources collected
Value recycling
through LVC is used for
local development
Introduction - Types of Land value capture in India

Control of government owned land/property

Partnership
01 Instruments Captures increase in land value due to investments & infra projects

By leasing it out for a fee or providing services

Use of regulatory power to control Land use and urban planning parameters
Value Transfer
02 Instruments
Captures land value by setting development parameters

Effective approach to finance public infra projects

Use of Fiscal instruments like taxes, fees, and in-kind contributions
Fiscal

03 Instruments Mandating fiscal instruments on landowners/developers benefiting from

increased value

Effective approach to finance public infra projects

Introduction – Various LVC methods
Land value
Sale of tax
developmen
t rights

Land
Surcharge Vacant Fiscal Land
on new land tax lease
acquisition Partnership developmen Instruments
& PPP
Instruments t
developme
nt

Value Special Property

Town Impact Fee Transfer assessment Tax
Planning district
Schemes Instruments

Bettermen
t Levy
Introduction Legal and regulatory framework for land value capture in India
Planning Execution
&
Project Design Strategy
Initiation &
Strategy

Investigation of land laws & Planning for applying LVC Govt./ULB identifies kind of VCF Regular monitoring & tracking
policies instruments to impact area instruments to be used and how project progress

Feasibility of current VCF Analyzing DPR MOU between central & state MOU between central & state
tools govt. (if Central department govt. if Central department project
project)

By evaluating instruments Consult with stakeholders MOU controls management, MOU controls management,
from states/countries distribution of funds distribution of funds
Introduction Legal and regulatory framework for LVC in India
Identification of key challenges and opportunities.

Challenges Opportunities

Efficient utilization of urban space and

Institutional coordination between multiple
supporting infrastructure by concerted efforts
govt & transit agencies.
of govt agencies.

Absence of consolidated planning framework Alternate avenue to generate income from

for efficient development control. land other than direct sale.

Equitable break-up of cost, profit and risk

Lack of consensus among stakeholders
distribution among stakeholders in
regarding benefits & implementation of VCF.
transparent manner.
ULB can become financial autonomous which
Implementing TOP and VCF involves long
reduces their fiscal dependence and improve
gestation periods and significant initial capex.
their functional capacity.
Brief of land value capture practices
Vacant Tax incremental Property For change of
TDR
land tax financing tax land

Premium on Betterment
Tax based Levy fee
additional
FAR

Impact fee
Land pooling/
Land readjust-
ment 01 Fee Special
02 based Assessment
district
Land Pooling
System For
regularizing
Developm-
ent based 04 unauthorized
development

Land Surcharge on
Acquisition new building
permits
Identification of best practices that could be adapted to the Indian context

Best Practices

Land Tax incremental Transit focused

readjustment financing development fees

Reinvesting tax Used to finance

revenue from urban development
increasing property initiatives
values
Facilitate Development by
reorganizing land
ownership

TIF account in Assessing tax of

which tax premises near transit
increment(betw hubs
een base and
Addresses
Technology in new EAV is
land
challenges of
captured) is
Fee is proportional to
Land acquisition, the appreciation in
readjustment for deposited into
resistance from the land value due to
transparency special TIF
landowners
account transit facilities
Maha metro-Nagpur metro
Map
ADDITIONAL STAMP DUTY

• 5% of the Amendment to
100% of the
value of the the Maharashtra
Revenue
Existing & transaction + Municipal Sharing collected in city
Regulatory Corporations Act
Mechanis
Additional • Additional 1% to Levy Addl.
wide Surcharge
of the value as Framework to be granted by
Rate Surcharge on m
a surcharge on GoM to Metro
stamp duty 1%
stamp duty Authority
in notified cities.

Instruments
to generate
revenue for ADDITIONAL PURCHASABLE FAR
project
Upto 4 • 50%- Metro
depending on 1.25 times Authority
Max Sharing
road width Rate of the the ready
permissible Mechanis • 50%-Nagpur
500m on either Premium reckoner
FAR side of m • Muncipal
rates
alignment Corporation
Comparative analysis of land value capture in India and other jurisdictions

DELHI

AHMEDABAD BHOPAL

BHUBANESHWAR
MUMBAI
PUNE

HYDERABAD

HUBLI-DHARWAD

BANGALORE
CHENNAI

KOCH
I
Overview of Land value capture projects in India
STATE ACT STRATEGY RESULT
GUJARAT Gujrat Town Planning & A portion of the developed property Gujarat International Financial Tec-City
Urban dev. Act, 1976 would subsequently be given back to (GIFT City)`
the original landowners by the
government in exchange for
infrastructure and services

MAHARASHTR Maha Regional & Town Agencies had to use land pooling to buy Magarpatta City is an example of a
A Act, 1966 property. This is flak because of being successful land pooling transforming
confusing & favorable for developers agricultural land into a sustainable urban
community.

ANDHRA Land pooling program 2015 A portion of property given back to The state government in Andhra Pradesh
PRADESH landowners from the government. Fails launched the Land Pooling Program
to offer landowners with compensations

TAMIL NADU Town & Country enabling the formulation of land The idea has had difficulty being put into
plan Act, 1971 acquisition strategies and the drafting of practice
development plans

DELHI Land pooling policy 2013 Allowed private landowners to Delhi Development Authority implemented
voluntarily pool their property for the land pooling policy
development
4. Conclusion
Considering the significance
of implementing effective
Land Value Capture policies
and frameworks in India for
financing infrastructure
and managing urban
growth and the
corresponding challenges
and opportunities
associated with LVC.
Engagement with various
There is no one-size-
stakeholders, including
fits-all approach to LVC
government agencies,
policies and
private sector actors, and
frameworks, and the
civil society organizations,
best approach will
will develop policies and
depend on the unique
frameworks that are
needs and challenges
effective, equitable, and
of each city or region.
sustainable.
 BIBLIOGRAPHY

1. George E. Peterson, W. B., 2009. Unlocking Land Values to Finance Urban Infrastructure. [Online] Available at:
https://documents1.worldbank.org/curated/en/723411468139800644/pdf/461290PUB0Box3101OF FICIAL0USE0ONLY1.pdf
2. Lincoln Institute of Land Policy, 2012. Value Capture & Land Policies, Proceddings of Land Policy Conference 2011. [Online]
Available at: https://www.lincolninst.edu/sites/default/files/pubfiles/value-capture-and-landpolicies-chp.pdf
3. Lincoln Institute of Land Policy, 2018. LAND VALUE CAPTURE: Tools to Finance our Urban Future. [Online] Available at:
https://www.lincolninst.edu/sites/default/files/pubfiles/land-value-capture-policybrief.pdf
4. MOHUA, 2021. Value Capture Finance Policy Framework. [Online] Available at:
https://mohua.gov.in/upload/whatsnew/59c0bb2d8f11bVCF_Policy_Book_FINAL.pdf
5. NITI Aayog, 2022. LVC&S Workshop Proceedings. [Online] Available at: https://www.niti.gov.in/sites/default/files/2022-
04/LVC&S_Workshop_Proceedings_25042022.pdf
6. OECD, 2022. Global Compendium of Land Value Capture Policy Highlights. [Online] Available at:
https://www.oecd.org/cfe/cities/Global-Compendium-Land-Value-Capture-PolicyHighlights.pdf
7. ORF, 2017. LVC in Mumbai Metro. [Online] Available at: https://plataformaurbana.cepal.org/sites/default/files/2022-
06/LVC%20in%20Mumbai%20Metro%20Development.pdf
8. Walters, L. C., 2013. Land value capture in policy and practice. [Online] Available at:
https://www.researchgate.net/publication/263845034_Land_value_capture_in_policy_and_practice
9. World Bank, 2015. Financing Transit-Oriented Development with Land Values. [Online] Available at:
https://www.worldbank.org/en/topic/urbandevelopment/publication/financingtransit-oriented-development-with-land-values
10. WRI, 2018. Financing - Land Value Capture. [Online] Available at:
https://thecityfixlearn.org/sites/default/files/TOD%20in%20Indian%20Cities%20IV_Presentation.pdf
11. WRI, 2021. Land Value Capture Financing for Implementing TOD in Indian Cities. [Online] Available at:
https://www.wricitiesindia.org/sites/default/files/FSCI%20brochure_31.03.2018_0.pdf
REAL 674: Land & Regulatory Framework for Built Environment

Land Value Capture in India

Course Guide: Dr. Reema Bali

Presented by:
AJU J GEORGE A13558922001
RITESH KURAR A13558922002
MEHUL SARKAR A13558922003
GUJARAT
• Gujarat adopted the Town Planning and Urban Development Act in 1976
• The act allowed landowners to donate their land to the government for development
• The government would then give back a portion of the developed property to the landowners in exchange for
infrastructure and services
• This strategy has enabled large-scale initiatives in Gujarat, such as the construction of the Gujarat International Financial
Tec-City (GIFT City)
MAHARASHTRA
•Maharashtra enacted the Regional and Town Planning Act in 1966
•Land pooling was allowed for the establishment of new construction plans
• Magarpatta City is an example of a successful land pooling project in Maharashtra, transforming agricultural land into a
sustainable urban community.
ANDHRA PRADESH
• Andhra Pradesh launched the Land Pooling Program in 2015
• Landowners could pool their property for development and receive a portion of the developed property and infrastructure
in exchange
• However, the program has faced criticism for offering inadequate compensation to landowners.
TAMIL NADU
•Tamil Nadu passed the Town and Country Planning Act in 1971
•The act enabled land acquisition strategies and development plans
• Implementation has been difficult due to transparency issues and inadequate compensation for landowners.
DELHI
•The Delhi Development Authority implemented the land pooling policy in 2013
• Private landowners could pool their property for development, with revisions made to the policy to address stakeholder
 2. Legal and regulatory framework for LVC in India

Facilitation & promotion of adoption of appropriate Value capture finance methods

Investigate the feasibility of
current VCF techniques.
Project
Initiation
Execution &
Planning
Operation
Strategies to cover
Determination of impact area measurement of Reliable system for fund
of infra project that entails management.
incremental value,
anticipated value rise. tax, time tenure, usage of Tracking project progress
Identification & consulting with collected funds. and information disclosure
shareholders/beneficiaries. to public.
Design &
Strategy