Land value gains and value capture: The potential for financing public transport infrastructure

This chapter addresses one of the current problems in transport planning, namely how to finance public transport investment from land value gains (known as value capture) rather than from direct government financing or through the fare box. The implementation of value capture provides the opportunity to open up new and equitable financing because the burden of funding is spread amongst the beneficiaries.

The chapter begins by outlining the theory as to why developments in transport infrastructure can lead to land value gains. A central part of the chapter is the evidence as to the size of potential gain, because this underpins the ability of value capture mechanisms to be successful. The chapter then turns to value capture strategies, which are evaluated against a number of normative criteria and with illustrative examples. As the size of the value uplift determines the ability of value capture to deliver on finance, the penultimate section of the chapter presents new empirical work to predict value uplift. The conclusion summarises the chapter content and makes suggestions for future research.