Land value capture as a method to involve private developers in placemaking projects
M.M. Santema (TU Delft - Architecture and the Built Environment)
E.H.M. Geurts – Mentor (TU Delft - Real Estate Management)
H.W. de Wolff – Graduation committee member (TU Delft - Urban Development Management)
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Abstract
Redevelopment of inner-city areas is a complex process involving multiple stakeholders, extensive timelines, and a variety of governance structures and financial mechanisms. The public party is primarily responsible for the quality of public space in the Netherlands. However, the municipalities face increasing financial challenges while private developers gain more land and thus more benefits from a high quality public space. To create those high quality and attractive places, placemaking can be introduced in the area redevelopment. It can be temporary and strategically applied to increase the attractiveness of the area, which results in increased private real estate values while it is publicly funded or subsidized. If private developers engage in placemaking, municipal spending can be reduced and the expenses and benefits of placemaking can be more evenly distributed. Therefore, this research examined a type of financing method, called ‘land value capture’, that might be utilized to engage private developers in placemaking projects. The research question that is addressed is as follows: To what extent can land value capture be applied in governance of area redevelopment to involve private developers in placemaking projects in the Netherlands?