Prof David Dowall- "Reorienting cities- Effective Land Use Policies_Part 2"

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Reorienting cities—effective land use policies

Part 2: Markets and Incentives

Professor David DowallUniversity of California, Berkeley

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First principles: how markets and planning interact

• Understanding the relationship between markets and planning:– The demand for land is derived

from the demand for economic activities that take place on it—housing, offices, retail uses

– Planning per se does not generate demand for land, it regulates patterns of land use

– Therefore planning needs both regulations and incentives to successfully shape urban development

• Planners need to know how urban land markets work– Demographic and economic

drivers shape the demand for land

– Infrastructure, particularly transportation access influence the demand for and price of land

– Overly restrictive land use can increase land prices and make real estate expensive and unaffordable

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How developers and planners think about land

Developer perspectives• Is site in an attractive location

that will attract buyers and renters?

• Can the site access adequate infrastructure?

• How will government respond to proposed project?

• Can I get an acceptable return on my investment (land and building cost)?

Planner perspectives• Will the development of the site

foster the implementation of the structure plan and benefit the city?

• Does the site possess adequate infrastructure access?

• Are there any negative environmental or social impacts that may result from the project?

• Are there ways collaborate with the developer to enhance positive public impacts

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Estimates of global urban land use 2001,(Modis 500m Model)

Schneider, Friedl and Potere, 2009

Region Urban land extent (sq.km.) Percent of total

North and South America 225,245 34

Europe 149,394 23

Africa 68,834 10

South-Central Asia 64,973 10

East Asia and Pacific 150,313 23

Total 658,760 100

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New York’s Urban Development 1930 - 2000

1930s

1950s

1960s

1970s

1980s

1990s

Built-up area per person, selected Indian cities

0

50

100

150

200

250

300

Sq

uar

e m

eter

s p

er

per

son

Coimbatore

Hyderabad

JaipurKanpur

Mumbai

Pune

T1 T2

Income and economic activity is increasing urban space per capita

Population density trends, selected Indian cities

050

100150200250300350400450

Persons per hectare

Coimbatore

Hyderabad

JaipurKanpur

Mumbai

Pune

T1 T2

Population density is falling, meaning more urban land will be required per person

Declining densities are a global urban challenge

• Conversion of agricultural land• Increase in “heat island effects” that

contribute to climate change• Rising energy consumption—mainly

transportation and commuting• Undermining of agglomeration economies• Governance is more complicated

Sprawl and energy consumption

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Understanding how urban land use planning contributes to sustainable urban development

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Bangkok’s transport driven urban form

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Structure plans frame and guide urban development but infrastructure systems must be programmed as well

Rankings for infrastructure for selected countries (Global Competitiveness Index)

111

98

96

82

66

45

41

38

27

20

17

2

0 30 60 90 120

Vietnam

Phillipines

Indonesia

Cambodia

China

New Zealand

Thailand

Australia

Malaysia

Korea

Japan

Singapore

11299

9589

6150

473634

2219

1

0 30 60 90 120

PhillipinesVietnam

IndonesiaCambodia

ChinaAustraliaThailand

KoreaJapan

New ZealandMalaysia

Singapore

104

102

94

77

50

43

37

35

24

22

14

1

0 30 60 90 120

Phillipines

Vietnam

Indonesia

Cambodia

China

New Zealand

Australia

Thailand

Malaysia

Japan

Korea

Singapore

Overall Quality of Infrastructure Ranking

Quality of Ports Ranking Quality of Roads Ranking

World Bank, 2010.

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Financing new development

• Special districts• Improvement districts• Subdivision funding

agreements • Exactions• Betterment levies • Property taxes• User fees• PPPs

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P3 project financing options

Fully Public Fully

Private

O&M Contract

Super Turnkey

DB

LDO

Temporary Privatization

BBO

BTO

BOT BOO

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An example of a PPP project:Concession project participants

Federal Government

State GovernmentCoordination

Transport ProjectCommercial Bank

Development Bank

Financial Agent Advisor

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Old street grid patterns and small parcels limit opportunities for high-density development

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Example of land readjustmentESCAP

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Minburi land pooling/Readjustment project, Bangkok: before and after

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Redevelopment in LA: Bunker Hill

Public acquisition and clearance The final product

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Zoning incentives

• TDR• Density bonus

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Using TDRs as incentives for open space

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Are new towns a panacea?

London’s plan Tokyo’s reality

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A Virtuous Cycle

Infrastructure investments

Morebuilt-up space

Increase property

values & taxes

POLICIES

Higher GDP growth

in cities

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Evolution of planning has shaped good practice

• Rational model– There is a public interest– Expertise is paramount

• Mediation– Neutral – non-neutral

• Negotiation • Advocacy• Diplomacy• Mutual learning• Collaboration

Community

Developer

Planner

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Conclusions to Part 2

• Planners need to understand how urban land markets work to be more effective

• Major challenge is to promote more sustainable cities-less sprawl, more energy efficiency

• Promote spatial structure to enhance economic efficiency

• Planning and infrastructure go hand in hand

• Planners need to develop models of taxation and value capture to finance infrastructure and use these resources to improve mobility, connectivity and competitiveness

• Planners need to “optimize within their local systems so “one size fits all is not effective”