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

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