l Smart Growth for China Land Lines · u.S. policy agenda for a number of reasons. First, recent dramatic failures have highlighted the harmful effects of poor maintenance and age-related

Land LinesInfrastructure l Property Taxes l Inclusionary Housing l Smart Growth for China l Working Papers

L i n c o L n i n s t i t u t e o f L a n d P o L i c y

January 2009

J a n u a r y 2 0 0 9 •Land Lines •LincoLn institute of Land PoLicy�

◗ F e a t u r e s

2 anInfrastructureandeconomicrecoveryPlanfortheunitedstates P e t r a to d o rov I c h

Despite the challenges of overhauling existing policies and implementing a bold agenda for infrastructure investment, the decisive election of a new President on a platform of change presents a real opportunity and sense of momentum for action in Washington.

8 WhatPolicyMakersshouldKnowaboutPropertytaxes ro na l d c . F I s h e r

Although property taxes continue to be a fundamental and important revenue source for local government, they also remain exceptionally controversial. Still, the topic of property taxation seems to be one for which improved education and understanding is especially necessary.

15 Inclusionaryhousing,Incentives,andlandvaluerecapture n I c o c a l av I ta a n d a l a n M a l l ac h

We suggest that a better approach is to link IH to the ongoing process of rezoning—either by the developer or by local government initiative—thus treating it explicitly as a vehicle for recapturing for public benefit some part of the gain in land value resulting from public action.

◗ d e P a r t M e n t s

1 reportfromthePresident

22 FacultyProfile:MingZhang

24 newlincolnInstituteBook: Smart Urban Growth for China

25 othereducationalProducts: Community Partnering for Environmental Results Twentieth-Century New England Land Conservation

26 Programcalendar

28 Fellowships:laurieWayburn

29 recentlincolnInstituteWorkingPapers

c o n t e n t seditorann Leroyer

President & ceoGregory K. Ingram

chairman of the BoardKathryn J. Lincoln

January 2009 • VoLume 2�, numBer �

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report from the President

Infrastructure:spendingMoreandspendingWell

gregory K. ingram

Infrastructure spending is high on the current

u.S. policy agenda for a number of reasons.

First, recent dramatic failures have highlighted

the harmful effects of poor maintenance and

age-related deterioration on infrastructure

facilities. Second, infrastructure investment

is a candidate to stimulate the economy in the

current recession. Third, enhancing infrastruc-

ture is crucial to long-term economic compet-

itiveness and environmental sustainability.

Finally, infrastructure investments are an important deter-

minant of urban form, spatial development, and land prices.

But what is infrastructure? One common definition includes

all transport systems (road, transit, rail, air, water); all networked

utilities (power, pipelines, water supply, sanitation, telecom-

munications); irrigation and flood control; and pollution con-

trol and waste disposal. It excludes schools, hospitals, and

other public facilities.

International comparisons using this definition show that

countries spend an average of 4 percent of GDP on infrastruc-

ture, and that this share increases in step with economic

growth when annual growth rises above average rates of 2

to 3 percent. accordingly, for China to sustain its growth

rate of 10 percent requires an annual infrastructure invest-

ment share of similar magnitude. Based on data compiled by

the Congressional Budget Office, in 2004 the united States

public and private investment in infrastructure (as defined

here) was $302.5 billion, or only 2.6 percent of GDP, a share

that seems to have varied little since the early 1980s.

While u.S. spending on infrastructure has been low com-

pared to other countries, new investment cannot just be

turned up, like water from a faucet. Efficient spending must

be directed to specific projects that benefit the economy

over the long term and produce valued services that reduce

the costs of production, goods movement, congestion, ill

health, urban development, and economic growth.

The Congressional Budget Office reports that estimates

from other agencies indicate an additional $103.5 billion of

annual infrastructure spending (in 2004 dollars) can be jus-

tified in economic terms. These amounts include funds for

maintenance (following a “fix-it-first” policy), funds to expand

transport systems, and funds to achieve existing environ-

mental standards (particularly for rivers and waterways).

This spending would raise the GDP share

for infrastructure to about 3.5 percent.

Existing estimates of the economic im-

pacts of infrastructure investment—on the

order of 30,000 to 40,000 jobs per $1 billion

of infrastructure investment and long-term

growth in GDP—are based on the premise

that infrastructure investment will be efficient

and productive. If it is not, the multiplier effects

can be smaller and the investment can have

longer-term negative effects.

For example, to combat its deep recession in the 1990s,

Japan embarked on a large infrastructure investment program

that raised the public sector’s share of total investment

from 21 to 29 percent. This investment did little to stimu-

late growth, however, and the resulting increase in national

debt raised debt-servicing costs greatly. Because increased

infrastructure investment in the united States also will be

debt-financed, it is very important in terms of future u.S.

growth for new funds to be spent productively.

One of the major challenges facing increased infrastruc-

ture investment in the united States is that projects planned

in the past and ready for immediate implementation may

now be out of date. The u.S. economy faces significant new

challenges, including adapting to higher energy costs, re-

ducing carbon emissions, increasing alternative energy

capacity, and mitigating the effects of global climate change

affecting coastal areas and water availability.

These changes mean that business as usual is no longer

sufficient. Infrastructure investments must take account of

the need to increase urban densities, improve transit access,

coordinate transport and environmental investments across

metropolitan areas within emerging megaregions, and foster

green technologies in infrastructure itself. Better manage-

ment of existing infrastructure may be an alternative to some

new investments. For example, the Federal Highway adminis-

tration estimates that broader use of congestion tolls could

reduce highway investments by up to $20 billion per year.

Spending on infrastructure clearly can be increased, but

these resources must be allocated to carefully selected

projects that produce long-term benefits in the rapidly

changing economic and environmental circumstances of

the twenty-first century.


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dened,outdated,orobsolete.Whileothernations,includingGermany,France,spain,theunitedKingdom,andchina,aremakingboldinvestmentsinhigh-speedrail,publictransit,andrenewableenergy,theunitedstatesisstrugglingtomaintainitsexistinginfrastructureinastateof goodrepair.earlierthisyear,thecongressactedtofillan$8billionfundingshortfallinthehighwaytrustFund,muchof whichgoestomaintainroadsandbridges.Masstransitagencies,alsounderfundedandstrugglingtokeepupwithrisingridershiplevels,arenowfacingthelose-losepropositionof havingtoraisefareswhilealsocuttingservice. andinrecentmonths,anew,harshrealityhasemerged,overtakinginfrastructureinthenationaldebate:thetighteningof globalcreditmarketsandtheslowingof thenationaleconomy.aglobalfinancialcrisis,precipitatedbythecollapseof america’ssubprimemortgagemarketandseizing

Petra Todorovich

Infrastructureissomethingthatoftengoesunnoticed.unlessitbreaksorthedeliverysystemfails,thebridgethatspanstheriver,thedrinkingwaterthatcomesoutof thetap,andthelightthatswitchesonattractlittle

attention.however,inrecentyearshigh-profiledisasters—theleveefailuresinneworleans,thebridgecollapseinMinneapolis,andthesteampipeexplosioninnewYorkcity—havedemonstratedtheincreasingageanddisrepairof theinfrastruc-turethatwasbuiltbyearliergenerationsandthatamericanshaveincreasinglycometotakeforgranted. thereisgrowingrecognitionthateventhehighways,bridges,transitsystems,electricalgrids,waterpipes,andsewersthatarenotfailinginspec-tacularwaysarenonethelessincreasinglyoverbur-

A n Infrastructure and Economic Recovery Plan f o r t h e U n i t e d S t A t e S

© alex S. MacLean/Landslides

two solar-electricity generating systems in daggett, california, along with seven other similar facilities in the mojave desert, produce enough electricity for 500,000 people.

2LincoLn institute of Land PoLicy•Land Lines•J a n u a r y 2 0 0 9 J a n u a r y 2 0 0 9 •Land Lines•LincoLn institute of Land PoLicy�

A n Infrastructure and Economic Recovery Plan f o r t h e U n i t e d S t A t e Supof credit,hasplayedoutintheclosureof sto-riedinvestmentbanks,wildgyrationsinthestockmarkets,roundsof layoffs,andpleasfromamerica’sbankingandautomobileindustriesforassistancefromthefederalgovernment.

impetus for Bold actiontheconvergenceof theseinfrastructureandeco-nomiccrisesprovidesanimpetusforboldaction.america2050,ajointventureof thelincolnInsti-tuteof landPolicyandregionalPlanassociation,isworkingwithanationalcommitteeof civic,busi-ness,andgovernmentleaderstodevelopastrategicInvestmentFrameworkforroads,bridges,transitsystems,theenergygrid,waterinfrastructure,andtelecommunications.sinceitslaunchin2005,america2050hasbeengainingtractionamongpolicymakersandprofessionalsintheplanninganddevelopmentfieldsinitscallforanationalstrategytoaccommodateamerica’sprojectedpopulationgrowthandtheemergenceof mega-regionsinthetwenty-firstcentury.theonsetof adeepeningrecessionchangesthecontextof thisdiscussionandaddsurgencytotheneedtocreatejobsandinvestwiselyinthenation’sfuture. President-electBarackobamaandtheu.s.congressareconsideringboldactionstocreatejobsandrestoreeconomicprosperityearlyinthenewadministration.thereistalkof amajoreco-nomicrecoverybillwhenobamatakesoffice,andbothheandthedemocraticleadershipincongresshaveproposedfocusingoninfrastruc-turespendingasawaytostimulatetheeconomy.suchanapproachcouldbetargetedtoaddressthedismalconditionof america’sexistinginfrastruc-tureandtodevelopthecapacitythatisneededtoaccommodatethenextgenerationof populationandeconomicgrowth. Inanticipationof thisunusualopportunity,america2050isdevelopingacomprehensiveapproachtoinfrastructureinvestmentthatcouldhelpthenationmeetitscorechallenges:rebuildingtheeconomy,achievingenergyindependence,andmitigatingclimatechange,whilepositioningthenationforlong-termeconomicprosperityandcompetitivenessintheglobaleconomy.

thisspring,america2050launcheda“rebuild-ingandrenewingamerica”campaigntodrawnationalattentiontotheneedforaninfrastructureinvestmentplan.evenbeforethefullextentof theeconomiccrisishadbeenrevealed,stronginterestwasevidentinthecaliberof participantsatakick-off forumheldattheWoodrowWilsoncenterinWashington,dc,onMay9,2008.Withthesup-portof thelincolnInstitute,theforumconvenedbusinessandlaborleaders,philanthropists,andelectedofficials,includingtheGovernorof Penn-sylvaniaanddemocraticandrepublicanmem-bersof congress,demonstratingbroad,bipartisaninterestintheneedtoaddressamerica’sinfra-structureneeds. Movingforward,america2050isholdingaseriesof forumsinthenation’smegaregionstoengageexpertsindifferentregionsonpolicyapproachestotransportation,energy,andwaterinfrastructure,andtodrawattentiontothisoppor-tunitytocreatejobsandstimulatetheeconomy. thenotionof anationalinfrastructureplanfortheunitedstatesmayseemlike,inthewordsof historianrobertFishman(2007),“anexerciseinbureaucratichubris,”butinfact,itisoneof theoldesttraditionsof ourcountry.In1808,underPresidentthomasJefferson,treasurysecretaryalbertGallatinproposedaseriesof roadsandcanalsincorridorsthatwerelaterusedtobuildthenation’srailnetwork,andtodevelopandunifythenorthwestandlouisianaterritories.In1908,Presidenttheodorerooseveltcompletedasecondnationalplandesignedtopromotedevelopmentinunderperformingregionsof thesouthandWest,suchassoutherncalifornia,atlanta,seattle,andPhoenix,throughconservationanddevelopmentof naturalresources.Inthe1930s,PresidentFrank-lind.roosevelt’snationalresourcesPlanningBoardproposedpublicworksinvestments,includingwhatlaterbecametheinterstatehighwaysystem. atthebicentennialof theGallatinPlanandthecentennialof thetdr’sconferenceof Governors,andasournationfacestheworsteconomiccrisissincethenewdeal,perhapsthenotionof anewnationalplantoprovidearoadmapforinfrastruc-tureinvestmentsandeconomicrecoveryisnotso

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outlandish.liketheseprecedents,anewnationalinfrastructureplancouldgiveshapeandpurposetotransportation,energy,andwaterlegislationfordecadestocome.andlikethejobscreatedduringFdr’snewdeal,aneconomicrecoveryplanshapedbyinfrastructureinvestmentcouldleavealastinglegacyforamerica’sfuturegenerations. Inthiscrisiswemayhaveaonce-in-a-lifetimeopportunitytofinanceanambitiousprogramof infrastructurespendingwhileimprovingtheeffec-tivenessandstrategicfocusof ourinfrastructureinvestments.toachievethisgoalweneedtobesuccessfulinarticulatingtheimportanceof infra-structureinvestments,bothascounter-cyclicalprojectsthatcanputpeopletoworkduringthecrisis,andasthefoundationforastronger,moreresilienteconomyinthefuture.Withoutthesein-vestmentsincreatingcapacityforfuturegrowth,itcanbearguedthatamerica’seconomicprospectsandfuturecompetitivenesscouldbediminished. america2050’sstrategicInvestmentFrame-workwillincludeaphysicalplanfornationalnetworksof goodsandpassengermovement(in-cludingfreightrail,intercitypassengerrail,majorseaportsandairports,andimprovementstotheinterstatesystem),aswellaskeyinvestmentsinen-ergytransmission,waterinfrastructure,andcom-munications.Inspiredbytherolethatboldvisionshaveplayedinthepast,theframeworkwillincludeacoordinatedsetof policiesandgoalsforreform-ingfederalinfrastructurelegislation.Inreturnforgivingstatesandlocalgovernmentsgreaterflexibil-ityinhowtheyachievedesiredfederaloutcomes,programswoulddemandgreateraccountabilitytoperformancestandards.america2050hasadopteda“triplebottomline”approachtoevaluatinginfrastructureinvestmentsagainstthethreegoalsof economicreturn,environmentalsustainabilityandsocialequity. oneof thekeychallengeswillbetoreformexistingpoliciesthatworkatcrosspurposes.Forexample,transportationfundingthatfavorsroadbuildingoverpublictransitinvestmentmakesitmoredifficulttoachieveenergyindependence;andfarmsubsidiesforcommercialagricultureencouragetheuseof pesticidesandfertilizersthatpollutewatersheds,raisingthecostof protectingandprovidingcleandrinkingwater. despitethechallengesof overhaulingexistingpoliciesandimplementingaboldagendaforin-vestment,thedecisiveelectionof anewPresident

F e a t u r e anInfrastructureandeconomicrecoveryPlanfortheu.s.

onaplatformof changepresentsarealopportu-nityandsenseof momentumforactioninWash-ington.asobama’snewchief of staff,rahmemmanuelwasquotedassayinginmid-november,“ruleone:neverletacrisisgotowaste.thereareopportunitiestodobigthings.”

Key national and global trends america2050wasformedinresponsetoasetof long-termnationalandglobalchallengesthatwillshapeamerica’sgrowthanddevelopmentinthenextcentury. Population growth and demographic change.despitethecurrenteconomiccrisis,americaisgrowing.theu.s.censusestimatesthepopulationwillreach439millionpeopleby2050,andwillbeolderandmoreraciallydiversethanitistoday.thatnumberrepresentsa50percentincreaseinpopulationovertheyear2000,com-paredtoanincreaseof onlyabout130millionpeoplefrom1950to2000. Energy independence and climate change.Perhapsthegreatestchallengewefaceasanationistheneedtoshiftfromourdependenceonforeignoiltoanewenergyeconomythatdoesitsparttoreducegreenhousegases.suchatran-sitioncancreatemillionsof “greencollar”jobs,bymanufacturingsolarpanelsandwindturbines,creatingfuel-efficientcars,retrofittingbuildingstobecomemoreenergyefficient,anddevelopingtechnologyforcarboncaptureandstorage. Movement of goods.Weliveinaglobaleconomy,andone-thirdof ourGdPisbasedonforeigntrade.asneverbefore,theunitedstatesisreliantontruck-basedfreight,whichisexpectedtodoubleby2035(aashto2007).asaresult,congestiononourhighwayswillhaveadispropor-tionateimpactonbusinesses.evenif thetradevolumesweretoleveloff,america’sexistingports,intermodalconnections,andfreightnetworksareillequippedtohandlethevolumesof freighttheymovetodaywithefficiencyorreliability. Rising household costs and regional inequity.theglobaleconomyhascreatedwin-nersandlosers,andmanycitiesandregionshitbythelossof manufacturingjobshaveyettorecover.householdbudgetsareincreasinglypinchedbytransportationandenergycosts.ataregionallevel,accesstojobsisoftensegmentedbygeography,withthelocationof jobsandaffordablehomesmovinginoppositedirections.


Changing spatial patterns.Weareseeingchangingspatialdevelopmentpatternsandlength-eningcommutes.thefastestgrowingareasof thenationarethoseattheouterfringeof metropoli-tanregions,aspeople“drivetoqualify”foranicehousewithayard,goodschools,andotherper-ceivedamenities.Inexchange,theyspendmoretimeintrafficandmoreof theirhouseholdbudgetsontransportation. Emerging megaregions.Wearealsowit-nessingtheemergenceof anewurbanform—themegaregion—thatconsistsof networksof metro-politanareasconnectedbyoverlappingcommutingpatterns,businesstravel,industrialvaluechains,transportationinfrastructure,naturalsystems,andsharedhistoricalandculturalcharacteristics.america2050hasidentified11emergingmegare-gionswhereoverthree-quartersof thepopulationandeconomicgrowthwillbefocusedby2050(fig-ure1).thesemegaregionsarebecomingthenewproductiveenginesinnationalandglobalecono-mies,butonlyif wemaketherightinvestmentstomakethemefficient,productive,sustainableplaces.

new approaches to transportation, energy, and Water infrastructuredrivingtheneedforastrategicInvestmentFrame-workistherecognitionthatourcurrentapproachestoplanning,financing,building,andmaintaininginfrastructureinthiscountryareinsufficient,mis-guided,oroutdated.america’stransportationin-frastructure,withitsdirectimpactsonthenation’seconomiccompetitivenessandenvironmentalsustainability,iswidelymalignedforitseffectof perpetuatingamerica’sdangerousdependenceonforeignoilandautomobile-basedlanddevelopment.thenationalinterestinreformingtransportationpolicyisclear:thetransportationsectorconsumesroughlytwo-thirdsof america’stotaloilconsump-tion,withimpactsonourbalanceof paymentsandforeignpolicy. Inits“transportationfortomorrow”report,thenationalsurfacetransportationPolicyandrevenuestudycommission(2007)condemnedthenation’stransportationprogramfor“pursuingnodiscernablenationalinterest”otherthantherightsof “donorstates”andcongressionalearmarks.

f i g u r e �

megaregions are expanding across the united states

Source: america 2050, regional Plan association.

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andyet,whiletheprogramhasnodefinednation-alpurpose,ithasinherentbiasesthataredrivingusdownthewrongpathtowardincreasedfossilfuelconsumptionandforeignoildependence. Wemustchangethevastimbalancebetweenfederalinvestmentinhighwaysandinpublictran-sit—acumulativeratioof 9to1highwaytotransitinvestmentsince1956(u.s.PIrGeducationFund2008).Whileitwasmostpronouncedduringtheconstructionof theinterstatesystem,thefundingimbalancepersiststodayindecisionsaboutnewcapacity.Federalfundingfornewtransitprojectsisprovidedthroughahighlycompetitivegrantprogram,newstarts,withlimitedfundsandmanyapplicants.thislevelof scrutinydoesnotexistforcomparablenewroadprojects. energyinfrastructureinamericaissimilarlyillequippedtomeettheenergysupplyandclimatechangechallengesfacingthenationtoday.thenation’selectricalgridisbadlyoutdated,comprisingapatchworkof privateowners,andstillvulnerabletothetypeof widespreadblackoutthatcrippledtheupperMidwestandnortheasternseaboardinaugust2003.despitetherecentspurtof productioninnewwindandsolartechnologies,thegridlacksthecapacitytotransportelectricityoverlongdis-tancesfromthewindfarmsof upstatenewYorkorthesolarfarmsof arizonatothepopulationcenterswheretheenergyisneeded(Wald2008). thefederalgovernmenthasinvestedminimallyindevelopingthesmartGrid,atechnologythatcombinesbroadbandtechnologywiththegrid,allowingforreal-timemonitoring,peakhourpricing,

greaterredundancy,andtwo-wayflowsof energy.thesmartGridwillallowdistributedgeneration,soconsumerswithsolarpanelsontheirroofsorelectriccarswithleftoverenergyattheendof thedaycanpowertheirownhomesandevensellelec-tricitybacktotheutilitycompany.alsoneededareinvestmentsinsuperconductortechnologytotransportelectricityoverlongerdistancestomakebetteruseof renewableenergygeneratedinremoteplaces. Inadditiontotheseinvestmentsintheenergyinfrastructureof thefuture,astrongcommitmenttoefficiencyisthemostcost-effectivestrategyforalllevelsof governmentandtheprivatesector.citieslikeBoston,chicago,seattle,andnewYorkareleadingthewaybychangingvehiclefleets,retrofittingoldbuildingstobecomemoreenergyefficient,andpromotinggreateruseof publictran-sit.astrongercommitmenttoenergyefficiencybythefederalgovernmentcouldincludeanambiti-ousprogramtoretrofitallfederalbuildings,andapolicyforlocatingfederalbuildingsinareasaccessibletopublictransit,walking,andbiking. Waterinfrastructureisathirdareawherenationalpoliciesmustbeupdatedtomeettheneedsof thenewcentury.duringthe1970s,thefederalgovernmentfinancedsignificantinvestmentsinprogramssuchasthecleanWateract,whichachievedgreatgainsincontrollingpollutionfrompointsources,suchassewageplantsandfactories.thegrowingchallengetodayistocontrolnon-pointsourcepollutionthatflowsinrunoff fromurbanstormwatersystemsandagriculturalfacilities,whilealsoensuringanadequate,safesupplyof cleandrinkingwater. todaymorethan72,000milesof municipalwaterandsewerpipesinthiscountryaremorethan80yearsold,andtheinvestmentsmadeinthe1970sarenowreachingtheendof theirusefullives.theenvironmentalProtectionagencyhasidentifiedagapof about$534billioninunmetcapital,operat-ing,andmaintenanceneedstorenovateorreplacecleanwateranddrinkingwatersystemsoverthenext20years.(u.s.environmentalProtectionagency2002). Populationgrowthandmigrationinfast-growingmegaregionssuchassoutherncalifornia,thesouth-east,arizona,andlasvegasarealsotaxingdrink-ingwatersuppliesanddemandingcoordinated,watershed-wideapproaches.eveninwater-richregionslikethenortheastandtheGreatlakes,

F e a t u r e anInfrastructureandeconomicrecoveryPlanfortheu.s.

© M

ing Zhang

houston has introduced a light-rail transit system into its downtown areas.

�LincoLn institute of Land PoLicy•Land Lines•J a n u a r y 2 0 0 9 J a n u a r y 2 0 0 9 •Land Lines•LincoLn institute of Land PoLicy�

◗ a B o u t t h e a u t h o r. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Petra todoroVich is director of America 2050, based at the Regional Plan Association in New York City. She previously led the Civic Alliance to Rebuild Downtown New York, a coalition formed after 9/11. Contact: [email protected].

◗ r e f e r e n c e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

american association of State Highway and Transportation Officials (aaSHTO). 2007. Transportation investments in our future: A new vision for the 21st century. Washington, DC.

Fishman, robert. 2007. 1808–1908–2008: National planning for America. america 2050: Framing Papers for the rockefeller Foundation Global urban Summit. new york: regional Plan association.

national Surface Transportation Policy and revenue Study Commission. 2007. Transportation for tomorrow. http://www.transportationfortomorrow.org/

u.S. Environmental Protection agency. 2002. The clean water and drinking water infrastructure gap analysis. u.S. EPa Office of Water (4606M), Sep-tember. EPa-816-r-02-020. www.epa.gov/safewater

u.S. PIrG Education Fund. 2008. A better way to go: Meeting America’s 21st century transportation challenges with modern public transit. http://www.streetsblog.org/wp-content/pdf/aBetterWaytoGovuSPIrG.pdf

Wald, Matthew. 2008. The energy challenge: Wind energy bumps into power grid’s limits. The New York Times, august 27.

suburbansprawlisrequiringnewinfrastructureinvestmentsanddegradingdrinkingwaterqualityfordownstreamcommunities. allthechallengeswefacetodayinprovidingcleandrinkingwater,maintainingourwaterin-frastructure,andcontrollingfloodingwillonlybemagnifiedbytheeffectsof climatechange.Meetingthechallengeswillrequireengagingincomplex,multi-stakeholderstrategiessuchastherecentlysignedGreatlakescompact,whichcreatedaneight-statecommissiontoprotectwaterquality,alongwithinvestmentsinlandmanage-ment,infrastructurerepair,andpubliceducation.the role of megaregions in a national Plan Megaregionsarecomposedof multiplestates,regions,orlocaljurisdictionsthatwillabsorbthemajorityof thepopulationandeconomicgrowthinthetwenty-firstcentury.thecomplexityof work-ingacrossjurisdictionalboundariesoftencompli-catesinfrastructureplanning,whetherfortrans-portationcorridors,electrictransmissionlines,orwatershedprotection.however,thesemegaregionscanprovideone-stopshoppingforsurmountingthetrickiesthurdlestolarge-scaleinfrastructureplanning,andtheyarelogicalpartnerswiththefederalgovernmentindevelopingandimplement-inganationalinfrastructureplan. america2050ishostingforumsineachmega-regiontoidentifythestrategicinfrastructureprior-itiesandcommonpolicyapproachesthatcouldfacilitatethecreationof afederalinfrastructureandeconomicrecoveryplan.Inlate2008,forumsinchicago(fortheGreatlakesmegaregion)andsacramento(forthenortherncaliforniamega-region)convenedstakeholderstobeginthisdiscus-sion.theforumsarealreadyprovidinginsightsaboutstrategiesthatcanhelpthemegaregionsmeettheirownchallenges. IntheGreatlakesmegaregion,thelong-termdeclineof manufacturinghasbeencompoundedbythecrisisintheautoindustry,skepticismovertheeffectivenessof ethanolasanalternativefuel,andconcernsaboutcarbonemissionsfromcoal-poweredplants.smartlyaddressingthreecarbon-related“cs”—cars,coal,andcorn—couldpointthewaytoanewenergyeconomyfortheMidwest. Innortherncalifornia,thehighcostandlim-itedsupplyof housingintheBayareahaspushedsprawlinlandtothecentralvalley,givingrisetolongercommutesforworkersinsanFrancisco,

oakland,andthesiliconvalley.rampantdevel-opmentinthecentralvalleyalsothreatensitsprimeagriculturalland—thevalley’seconomicbaseandamajorsourceof foodforthenation.theseconcernscallforamegaregion-scaleplan-ningapproachtocoordinatetransportation,housing,andeconomicdevelopment.

conclusionthecrisisinourfinancialmarketsandthedeepen-ingnationalrecessionsuggestdifficulttimesfortheunitedstates.But,sometimesacrisisisnecessarytorallysufficientleadershipandpopularsupportforradicalchangestoaddressentrenchedpolicies,practices,andinertia.Withregardtoinfrastruc-tureandeconomicrecovery,wehavetwokeychal-lengestomeet.First,wemustrallysupportformakingsufficientlyboldinvestmentstoputpeopletoworkandmaketransformativeinvestmentsininfrastructure.second,wemustensurethatthechoiceswemakeaboutinfrastructureprovidenewmodelsof decisionmakingandaccountabilitytoobtaininvestmentsthatwilltransitionthenationtobealow-carboneconomywithenergyindepen-dence,andasustainable,equitablefuture.


Ronald C. Fisher

althoughpropertytaxescontinuetobeafundamentalandimportantrevenuesourceforlocalgovernment,theyalsoremainexceptionallycontroversial.thecommon,overarchingobjection

topropertytaxesisthattheyare“unfair”—unfairintheirdistributionacrossincomeclasses;unfairtoparticulargroupsof taxpayers(e.g.,homeowners,seniorcitizens,farmers);unfairbecauseincreasesinpropertyvaluearetaxedwithoutacashgaintooffsetthehighertax;unfairbecauseof ineptorcorruptadministration;unfairforfundingeduca-tionbecauseof widedisparitiesinpropertyvalues;andsoon(Youngman2002). economistsandothertaxanalystsexpressdif-ferentconcernsabouttheconsequencesof prop-ertytaxes,includingtheireffectsonefficienthous-ingconsumption,onthelocationdecisionsof bothhouseholdsandbusinesses,onthesupplyof capi-

talanduseof capitalinproduction,andonlocalgovernmentdecisionsabouttheefficientquantityof publicservices(Zodrow2008). asaconsequenceof thesevariedconcerns,thepropertytaxseemstobecontinuallyunderassault—thetargetforreform,reduction,orevenelimi-nation.theadoptionof Proposition13bycali-forniavotersin1978wasakeyeventinthewidelytermed“propertytaxrevolt.”votersinotherstatessubsequentlyadoptedlimitationssimilartocali-fornia’sorenactedexemptions,abatements,credits,orspecialfeaturestoreduceorconstrainpropertytaxesforvariousgroups.Inthe1980sand1990s,statelegislaturesreformedthefinancingof educa-tion,sometimesasrequiredorencouragedbyliti-gation,whichdecreasedorchangedthestructureof propertytaxesandoftensubstitutedrevenuesfromothersources. Inrecentyearsthepropertytaxrevolthasbeenresurgentasanumberof stateshaveconsideredproposalstoreduceoreveneliminatethepropertytaxbyexpandingalternativerevenues.Becausemanyof theseproposalssubstituteincreasedstatetaxesandnewintergovernmentalgrantsforlocalpropertytaxrevenues,theymayreducethefiscalautonomyof localgovernmentswhilealsode-creasingrelianceonpropertytaxes. reflectingPresidentKennedy’s(1962)warningthat“toooftenweholdfasttotheclichésof ourforebears,”manypopularcommentsandcriticismsof propertytaxeseitherreflectoutdatedviewsonthestateof taxadministrationorignorerecentresearchthatprovidesanewandsubstantiallydif-ferentperspective.thisis,of course,asmuchthefaultof taxanalystsasitispoliticalofficials.still,thetopicof propertytaxationseemstobeoneforwhichimprovededucationandunderstandingisespeciallynecessary.thefollowingconsiderationsmayhelpclarifysomeimportantaspectsaboutusingpropertytaxesasasourceof localgovern-mentrevenuesandamechanismforfinancinglocalservices.

What Policy Makers Should Know About

Property Taxes

© iStockphoto


Property taxes and Local governmentsProperty taxes are the financial foundation for local governments.the$346.3billionof propertytaxescollectedinfiscalyear2005accountedforabout28percentof alllocalgovernmentgeneralrevenue,butitconsti-tutednearly75percentof localgovernmenttaxes.astheprimaryrevenuesourcedirectlycontrolledbylocalgovernments,thepropertytaxhasbeencentraltolocalfiscalautonomy. Propertytaxesprovideaboutathirdof generalrevenueforpublicschoolsnationally,aboutaquar-terof revenueforcountygovernments,andabout20percentof revenueforcities(figure1).town-ships,manyof whichprovidepublicservicesinmoreruralareas,dependonpropertytaxesformorethanhalf of theirrevenue.overall,theshareof localrevenuefrompropertytaxesdecreasedinthe1960sand1970s,buthasremainedfairlyconstantinrecentdecades.

Replacing all property taxes would require more than doubling state sales taxes.totalpropertytaxes,salestaxes,andcorporateincometaxescollectedbyallu.s.governmentsareroughlyof thesamemagnitude—inthe$350to$450billionrange(figure2).In2005,propertytaxes($346.3billion)wereessentiallyequaltofederalandstatecorporateincometaxes($355billion),butgreaterthanbothgeneralsalestaxes($271.2billion)andselectiveexcisetaxes(suchasgasolineandcigarettetaxes,$197.8billion). accordingly,if allpropertytaxrevenueweretobereplacedbyhighergeneralsalestaxrevenuewithoutanychangeinthesalestaxbases,statesalestaxrateswouldhavetoincreaseby125per-cent.assumingtheaveragestateandlocalgeneralsalestaxrateisabout7percent,ratesof 15or16percentwouldbeneededtoreplaceallpropertytaxeswithnochangeinsalestaxbases.similarly,propertytaxrevenuecouldbereplacedbydou-blingallstateandfederalbusinessincometaxes,althoughthetrendinrecentyearshasbeentoreducebusinesstaxes.

Property taxes have been responsive to economic growth and relatively stable over time.twokeyquestionsforalltaxesconcerntheirlong-runbudgetimplications.doesthetaxbasegrow

Source: Fisher (2007).

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Property taxes as a Percentage of general revenue, by type of government, �9�2–2002

70

60

50

40

30

20

10

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Townships School Districts Counties Municipalities

Source: Fisher (2008).

f i g u r e 2

total taxes collected by type across all u.s. government Levels, 2005

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0Personal Income

Tax

Social Insurance

Tax

Corporate Income

Tax

Property Tax

General SalesTax

Selective Excise

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F e a t u r e WhatPolicyMakersshouldKnowaboutPropertytaxes

Source: Kenyon (2007, 41)

f i g u r e �

Volatility of state and Local tax revenue, �990–200�

0.15

0.10

0.05

0

-0.05

-0.10

-0.15

Perc

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1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

PropertySalesIncome

Rec

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on J

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automaticallyinresponsetoeconomicgrowth?andtowhatdegreedoesthetaxbasevaryfromyeartoyearastheeconomyfluctuates?thefirstquestionisimportantbecausedemandforpublicservicesnormallyincreaseswitheconomic(income)growth,requiringadditionalrevenuetoprovideadditionalservices.second,if ataxbasevariessubstantiallyasnationaleconomicconditionsvary,thenbudgetplanningbecomesmoredifficult. Propertytaxeshavebeenastablerevenuesource(especiallycomparedtosalesandincometaxes),varyingtheleastacrossyearsamongallthemajorstatetaxes(figure3).theshort-runstabilityof thepropertytaxbasereflectstheeconomicfactthatcapitalinvestment(bothresidentialandbusiness)isbynaturealong-rundecisioninfluencedmorebylong-runexpectationsthanshort-runeconomiccircumstances. accordingly,propertyvaluestraditionallyhavenotdeclinedsubstantiallywitheachrecession,andwhentheyhavedeclined,thetypicallaginassess-mentshasmaintainedtaxablepropertyvaluesatleastthroughthefirstpartof theeconomicdown-turn.Indeed,insomecases,propertytaxbaseswerecountercyclical,growingatthetimeswhensalesandincometaxbasesweredeclining. Propertyvaluesintheunitedstateshavere-flectedlong-runeconomicgrowth,sothat(untilrecently)propertytaxrevenuesalsoincreasedinresponsetogrowth(secondonlytopersonal

incometaxes).Propertyvalues,especiallyresiden-tialvalues,alsohaveincreasedinresponsetonewfamilyformation,suburbanization,improvementsintransportation,andnewbusinessinvestment.atthesametime,improvementsinassessmentprac-ticeshavepermittedpropertyassessmentsfortaxpurposestoreflecttheseincreasingmarketvalues.

Property taxes and homeownersTypical homeowner property tax payments are between $125 and $150 per month.totalpropertytaxesonalltypesof propertyintheunitedstateshaveremainedatabout3percentof totalpersonalincomesince1982(increasingmodestlyfromabout2.85percentin1982to3.15percentin2005).recentresearchshowsthatthemedianeffectivepropertytaxrateonallrealprop-erty(residentialandnonresidentiallandandbuild-ings)isabout1.7percentof totalpropertyvalue(Gravelle2007). Whatisthe“typical”propertytaxliabilityforahomeowner?the75millionyear-round,owner-occupiedhousingunitsexistingin2005hadamedianmarketvalueof $165,344andmedianmonthlyrealestatetaxof $127(u.s.censusBureau2005).themedianowner-occupiedhomevaluehadrisentoabout$191,000by2007,withamedianmonthlypropertytaxof $144(u.s.cen-susBureau2008). Withtherecenthousingmarketcrisis,priceshavedeclinedfromthepeak2007levels(sothatthe2005datamaybemoreaccuratenow).there-fore,half of u.s.homeownerspaylessthan$125to$150permonthinpropertytaxes.themedianhomeownerhadannualpropertytaxesof $1,524in2005and$1,728in2007,andaneffectiveprop-ertytaxrateof lessthanonepercent(.9percent)of propertyvalueinbothyears. of course,propertytaxamountsvaryamonghomeownersbecausetaxratesdifferamongcom-munities,andhomeownershavepropertiesof dif-ferentvalues.ahomeownerwithamedian-valuehomecanexpectannualpropertytaxesof $1,500to$3,300,orroughly$125to$275permonthif taxratesarehigherthanaverage(seetable1).ahomeownerwitha$300,000home(aboutatthe75thpercentileof owner-occupiedhousesin2005)couldexpectannualpropertytaxesof $2,700to$6,000($225to$500monthly),againdependingontaxrates.


Concerns about homeowner property tax burdens can be mitigated with targeted tax adjustments.nearlyeverystatehasprogramstoreduceorlimitpropertytaxburdensforselectedhomeowners,sothatnettaxamountsareoftenlowerthanindicat-edbytheamericanhousingsurvey.Forinstance,40statesprovidehomesteadexemptionsorcredits;34statesandthedistrictof columbiaprovidepropertytaxrebatesorcredits(oftencalledcircuitbreakers)thatapplyif propertytaxesexceedsomespecifiedpercentageof income;andatleast25statesandthedistrictof columbiaprovideprop-ertytaxdeferraloptionstopreventownersfromhavingtosellahousetopaytaxes(Baer2005).eligibilityformanyof theseprogramsisdeterminedbyincomeorwealth,oristargetedtospecifictax-payers,especiallyseniorcitizens. anotherconsiderationisthatpropertytaxesmaybe“reduced”throughfederalincometaxdeductionstakenbytaxpayerswhoitemizetheirdeductions.Federaldeductibilitycanbeamajoradvantageof localpropertytaxescomparedtolocalsalestaxes,becauseundercurrentfederaltaxlawtaxpayerswhoitemizedeductionsmaydeductstateandlocalpropertytaxesandeitherincometaxesorsalestaxes.Forstatesthathavebothincomeandsalestaxes,itisalmostalwaysbetterfortaxpayerstodeducttheincomeratherthanthesalestax.

Increases in property tax payments due to increases in property values may create a liquidity problem for households, especially when property values increase faster than incomes.Propertytaxesareleviedonthevalueof capital(primarilyland,structures,andequipment)usedin

producinggoodsandhousingservices.Inawell-functioningpropertytaxsystem,thetaxshouldberelatedtothemarketvalueof theproperty.If themarketandtaxablevaluesof propertiesinajuris-dictionriseandthetaxrateiskeptconstant(orif thetaxrateisreduced,butlessthanproportionallytotheincreaseinvalues),thenpropertytaxamountsforthosepropertiesthatareincreasinginvaluewillalsoincrease.Becausetheincreasedvalueof anowner-occupieddwellingisnotnormallyreal-izeduntilthehouseissold,taxpayersmayfacehigherpropertytaxeswithoutadditionalincome(cash)topaythehighertaxamount. thisissuemaybeespeciallyproblematicforindividualswhopurchasehomesbasedonthemaximummonthlypaymentthatthehouseholdcouldafford.Italsomaybeoneof thetwoprimarycontributorsbehindcallsformajorpropertytaxreductionoreveneliminationoverthelastdecade,aperiodwhenhousingpricesincreasedsubstan-tially.theotherfactoristherelationshipbetweenpropertytaxationandschoolfundingequity(seeKenyon2007). theexampleof ahouseholdwitha$100,000incomeandahomewithaninitialvalueof $300,000maybeinstructive(table2).Initially,thehouseholdhasamonthlymortgagepaymentof $1,600andamonthlypropertytaxpaymentof $250,sothathousingexpenseis22percentof income.If overfiveyearshousingvaluesgrow9percentannuallyandincomes3percent,thevalueof thehousewillbeabout$460,000andthehousehold’sincomeabout$115,900.Withacon-stanttaxrate,annualpropertytaxliabilitywillrisefrom$3,000to$4,600andmonthlypropertytaxpaymentsfrom$250to$383—anoverallhousingpaymentincreaseof $133permonth.although

ta B L e �

illustrative annual and monthly Property tax amounts

Value Percentile Market Value Effective Tax Rates (annual/monthly)

0.90% 1.00% 1.40% 1.70% 2.00%

20th $78,000 $702/$58.50 $780/$65.00 $1,092/$91.00 $1,326/$110.50 $1,560/$130.00

40th $130,000 $1,170/$97.50 $1,300/$108.33 $1,820/$151.67 $2,210/$184.17 $2,600/$216.67

median $165,000 $1,485/$123.75 $1,650/$137.50 $2,310/$192.50 $2,805/$233.75 $3,300/$275.00

60th $200,000 $1,800/$150.00 $2,000/$166.67 $2,800/$233.33 $3,400/$283.33 $4,000/$333.33

75th $300,000 $2,700/$225.00 $3,000/$250.00 $4,200/$350.00 $5,100/$425.00 $6,000/$500.00

Source: author calculations based on the 2005 american Housing Survey.


arguethatmanyindividualspurchasedhomeswiththeexpectationanddesirethatthevaluewouldincrease.recallthatahomevalueof $300,000wasinthetopquartileof allyear-roundowner-occupiedhomesin2005. twoprogramshavebeenusedbystatesandlocalitiestodealwiththisconcern.thefirst,cir-cuitbreakers,providestaxcreditsorrebateswhenpropertytaxamountsexceedsomethresholdof income.If propertytaxesrisefasterthanincome,thenacircuitbreakercreditorrebatemayeffec-tivelyreducetheamountof thetaxincrease.asecondpossiblesolutionistopermithouseholdstodeferpropertytaxpayments(oratleastthein-creaseinpayments)untilthehouseissold.Forthe$300,000houseexample,if theownersoldthehouseafterfiveyearsandhaddeferredonlytheincreaseinpropertytaxamountscomparedtowhenthehousewaspurchased,theownerwouldoweabout$4,560inbacktaxes(plusinterest),butwouldhavea$160,000capitalgainfromwhichtopaythedeferredtax.

distribution of Property tax BurdensThe overall distribution of property tax burden seems to be roughly proportional to income for the bulk of middle-income taxpayers.researchshowsthatforanationaluniformprop-ertytaxonallproperty,agraphof effectivetaxrates(i.e.,taxasapercentageof income)wouldbeu-shapedwithrespecttocurrentannualincome—regressive(falling)forthebottom30to40percentof households,proportionalforthemajority,andprogressive(rising)forthetop5to10percentof households.therisingtaxburdenforthetop10percentof taxpayersoccursbecausethenationalpropertytaxwouldreducetherateof returntoallformsof capitalownership,thusimposingarela-tiveburdenoncapitalowners,whoareconcen-tratedatthetopof theincomedistribution.If thesametaxiscomparedtoameasureof permanentorlifetimeincome,theoveralltaxburdenisessen-tiallyproportionaltopermanentincome. theresultisonlyslightlydifferentif oneac-countsforvariationsintaxratesbetweencommu-nitiesorbetweentypesof property.assumingthatthedifferentiallyhigherpropertytaxburdensfallonhomeownersandrentersinhigher-taxcommu-nitiesandconsumersof goodsproducedwithtaxedproperty,taxburdensareregressiveforthebottom


ta B L e 2

illustration of growth in Property Value and Property tax over five years

market Value $300,000

household income $100,000

Value to income ratio 3.0

mortgage amount $270,000

monthly mortgage Payment (principal + interest) $1,600

effective Property tax rate 1%

annual Property tax $3,000

monthly Property tax $250

total monthly expense (principal + interest + tax) $1,850

monthly housing expense/income 22%

change after five years

new market Value (9% annual growth) $460,000

household income (�% annual growth) $115,900

Value to income ratio 4.0

effective Property tax rate 1%

new annual Property tax $4,600

new monthly Property tax $383

new total monthly expense (principal + interest + tax) $1,983

change in annual Property tax $1,600

change in monthly Property tax $133

change in market Value $160,000

monthly housing expense/income 21%

Source: author calculations.

taxeshaverisenfasterthanincome,theratioof housingexpensetoincomehasfallen(from22to21percent),andthehousehold’shomeequityhasincreasedfrom$30,000(theinitialdownpayment)toroughly$190,000,a$160,000capitalgain. Whatarepossibleorappropriateresponsestothissituation?of course,nopolicyresponsemaybenecessary,becausehomeownersinthissituationarewealthier,atleastonpaper.Indeed,onecould


20to40percentof taxpayersandproportionalfortheremainder(comparingtoannualincome).theoverallresultisslightlylessprogressivebecauseof relativelylowerestimatedburdensforthehighestincomeindividuals.Incomparisontopermanentorlifetimeincome,theoveralldistributionof prop-ertytaxburdenbecomesabitmoreprogressive. certainly,researchdoesnotsupportthepopu-larviewthatsalestaxesarerelativelybetterforlower-incometaxpayers.thedistributionof prop-ertytaxesandsalestaxesarequitesimilar.salestaxestendtobemildlyregressivecomparedtocur-rentannualincomeandroughlyproportionalwithrespecttopermanentorlifetimeincome.however,thereareatleasttworeasonstothinkthattheseestimatesof overallpropertytaxincidencemaynotberelevantforspecificpolicydecisionsconsid-eredbyindividualstatesorlocalgovernments,asnotednext.

The expected economic effects of a specific property tax change depend on which governments change the tax, and how.Becausethedistributionof burdendependsonthenatureof thetax(uniformordifferential)andonthegeographicextentof anypropertytaxchange,analyzingtheoverallincidenceof apropertytaxmustbedonewithcare.First,anationwidereduc-tioninpropertytaxeswouldbenefitallownersof capital,proportionaltotheamountof capitalowned.suchachangeclearlywouldfavortherich,whoownrelativelymorecapital. second,if onlyonestateeliminatedtheproper-tytax,thebenefitwouldgotolandowners,hous-ingconsumers,andworkersinthatstate.Whethersuchachangeispro-richorpro-poordependsontheincomelevelof workersandhome-ownersinthatstateandwoulddiffergreatlybetweenstatessuchasconnecticutandMississippi.third,if onlyonelocalgovernmenteliminatedthepropertytax(byswitchingtoalocalincomeorsalestax,forex-ample),thebenefitof thepropertytaxreductionwouldgoalmostexclusivelytolandownersinthatlocality.thedistributionaleffectdependsontheeconomiccharacteristicof thoselandowners,someof whommaynotevenberesidentsof thelocality. oneneedstobecarefulof the“catch22”in-herentinthiskindof analysis.Itmightseemthatpropertytaxreductioninalllower-incomestateswouldbeapro-poorpolicyforthenation.however,

if onelow-incomestatereducespropertytaxtheeffectswouldbeprogressiveorpro-poor,butif alllower-incomestatesweretoreducepropertytaxessimultaneously,theeffectwouldbesimilartoanationalreductioninpropertytax.thatis,theeffectwouldberegressiveorpro-richbecausethebenefitswouldaccrueprimarilytotheownersof capital. topredicttheincomedistributionalconse-quencesof changesinpropertytaxesatthestateandlocallevel,itisimportanttoknowwhetherjurisdictionswithrelativelyhighpropertytaxratestendtobehigh-orlow-incomecommunities.theevidenceonthispointvariesgeographically,espe-ciallyforlocalgovernments.amongstates,how-ever,thenumberof low-incomestateshurtbyhightaxratesisessentiallyoffsetbylow-incomestatesthatbenefitfromlowtaxrates.

Under certain conditions, the property tax serves as the “price” for living in a given community and consuming the local government services. Propertytaxesmaybecomelocationalpricesorfeesif:1)consumerschooseresidentiallocationsbasedonthepropertytaxandservicepackageofferedbythelocalgovernment;2)therearedif-ferentcommunitiesfromwhichtochoose;and3)thereissomemechanism(suchaszoning)tomaintaintheequilibrium(Fischel2001).Insuchasituation,individualswhodesirethesamefiscalpackagearegroupedtogether.If onecommunityhashighpropertytaxesbecauseresidentsdemandarelativelylargequantityof publicservices,itsresidentsaresimplypayingfortheservicestheyuse.

© Jupiter Images

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◗ a B o u t t h e a u t h o r. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ronaLd c. fisher is professor of economics and accounting at Michigan State University. His research interests include state and local public finance, intergovernmental fiscal relations, and local government structure, in both the United States and China. Contact: [email protected].

◗ r e f e r e n c e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Baer, David. 2005. State programs and practices for reducing residential property taxes. Washington, DC: aarP Public Policy Institute.

Fischel, William a. 2001. Municipal corporations, homeowners, and the benefit view of the property tax. In Property Taxation and Local Government Finance, Wallace E. Oates, ed. Cambridge, Ma: Lincoln Institute of Land Policy, 33–77.

Fisher, ronald C. 2007. State and local public finance. Mason, OH: Thomson South-Western.

———. reconsidering property taxes: Perhaps not so bad after all. Working Paper. Cambridge, Ma: Lincoln Institute of Land Policy.

Gravelle, Jennifer. 2007. Who pays property taxes? a look at the tax effects of property taxes across the states. State Tax Notes, December 24, 887–890.

Inman, robert P. 1994. Comments. In Tax Progressivity and Income Inequal-ity, Joel Slemrod, ed. Cambridge, uK: Cambridge university Press, 89–94.

Kennedy, John F. 1962. yale university Commencement address, June 11.

Kenyon, Daphne a. 2007. The property tax—school funding dilemma. Cambridge, Ma: Lincoln Institute of Land Policy.

u.S. Census Bureau. 2005. American Housing Survey for the United States: 2005. Washington, DC.

———. 2008. American Housing Survey for the United States: 2007. Washington, DC.

youngman, Joan. 2002. Enlarging the property tax debate: regressivity and fairness. State Tax Notes, October 3, 45–52.

Zodrow, George r. 2008. Property tax incidence and the mix of state and local finance of local expenditures. State Tax Notes, May 19, 567–580.

If propertytaxesserveasbenefittaxesorfeesinthismanner,thenthetaxdoesnotchangeratesof returntocapitalorcreateincentivesforrealloca-tionof capitalbetweenjurisdictionsoruses.Inthiscase,itdoesnotmakesensetoconsidertheinci-denceof thetaxseparatefromtheprovisionof publicservices,becausethetaxsimplyreflectsthedemandfortheservices,witheachtaxpayerpay-ingthecostof thedesiredconsumptionof localpublicservices. Whethertothinkof propertytaxesastaxesonmobilecapital,orasfeesforresidinginaparticu-larjurisdictionandbenefitingfromtheservicesprovidedthere,remainsacontroversialissueamongsomepublicfinanceanalysts.supportersof thebenefittaxviewcitestudiesshowingthatmanymetropolitanareashavenumerouslocalitiesoffer-

ingdifferentservices,eachremainingrelativelyhomogeneous,andthatthepopularityof compli-catedzoningrulesmayservetomaintaincommu-nityhomogeneity.Indeed,thisperspectiveseemstoapplyquitewellinsuburbanareasof relativelylargemetropolitanregions(seeInman1994). thereislessagreementonwhetherthisper-spectiveappliestoruralareasandlargecentralcities.Inruralareas,individualsmayhavefewresi-dentialchoicesbecauseof thegeographicsizeof communities,ormayfinditinfeasibletoseparatetheirworkandresidentiallocationchoices.thisperspectivealsomaynotapplyinlargecities,whichareinherentlyquiteheterogeneous.Prop-ertytaxesonhomeownersinlargecities,therefore,maynotnecessarilycorrespondtothebenefitsfrompublicservices,sothedistributionaleffectof thetaxmaybeimportant.

What this all meansWhatmightbesaid,then,indefenseof propertytaxesrelativetothemainalternativesof incomeorsalestaxes?relativelymodestpropertytaxesfortherepresentativehomeowner(lessthanoneper-centof propertyvalueor$150monthly)supportamyriadof importantlocalgovernmentservicesandhavepermittedlocalgovernmentstofunctionindependentlyof higher-levelgovernments.Prop-ertytaxesarerelativelyvisibleandthuscontributetogovernmentaccountability.Propertytaxreve-nueshavebeenresponsivetoeconomicgrowthandperhapsthemoststableof alltaxbases.Prop-ertytaxesoftenareeconomicallyefficientcom-paredtoalternatives,especiallyif theyserveaslocalbenefitcharges.Finally,propertytaxesmayaddtooveralltaxprogressivitycomparedtothealternatives;importantly,propertytaxesareinmostinstancesmoreprogressivethansalestaxes. althoughsomeof thepoliticalpolicyconcernsaboutpropertytaxesthusseemtobeinaccurateorexaggerated,italsoseemsclearthatmanyof theseconcernscontinuetoinfluencepolicydecisions.If taxpayersorpublicofficialsobjecttopropertytax-esondistributional,efficiency,oradministrativegrounds,therelevantquestionstoexplorefurtherare:howdopropertytaxescomparetothealter-natives;howcantargetedadjustmentsbeusedtoalterpropertytaxesforselectedtaxpayers;andhowimportantisitforlocalgovernmentstomaintainfiscalindependence.



Nico Calavita and Alan Mallach

Inclusionaryhousing(Ih)programsarelanduseregulationsthatrequiredevelopersof market-rateresidentialdevelopmenttosetasideasmallportionof theirunits,usuallybetween10and20percent,forhouseholds

unabletoaffordhousingintheopenmarket.al-ternativelytheycanchoosetopayafeeordonatelandinlieuof providingunits.originatingintheearly1970s,inclusionaryhousinghasgrowntobeamajorvehiclebywhichaffordablehousingunitsareprovidedinlargepartsof theunitedstates,aswellasanimportantstrategyforaffordablehous-inginmanyothercountries. Fromthefirstdaysof Ih,therehasbeenwide-spreaddebateoverwhatissometimescalledthe“incidence”controversy—thatis,howthecostsof providingaffordable,andbydefinitionbelow-

market,housingareaddressed,andwhichof thepartiesinarealestatetransactionactuallybearsthosecosts.asaresultof widespreadconcernthatcostsarebeingbornebydevelopersand/ormar-ket-ratehomebuyers,andreflectinglegalconcernsassociatedwiththetakingsissue,manymunicipali-tiesenactinginclusionaryordinanceshavecom-binedthemwithincentivesorcostoffsetsdesignedtomaketheimpositionof anaffordablehousingobligationcost-neutral.Manyof theseincentives,however,displacecostsontothepublic,eitherdirectlyorindirectly. Wesuggestthatabetterapproachistolinkinclusionaryhousingtotheongoingprocessof rezoning—eitherbythedeveloperorbylocalgovernmentinitiative—thustreatingitexplicitlyasavehicleforrecapturingforpublicbenefitsomepartof thegaininlandvalueresultingfrompublicaction.

Inclusionaryhousing,Incentives,andlandvaluerecapture

the La costa Paloma apartments in carlsbad, california, have ��0 apartment units affordable to households earning at or below 50 and �0 percent of the area median income.

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��LincoLn institute of Land PoLicy•Land Lines•J a n u a r y 2 0 0 9 J a n u a r y 2 0 0 9 •Land Lines•LincoLn institute of Land PoLicy��

the evolution of inclusionary housing severalfactorscontributedtothedevelopmentof inclusionaryhousingintheearly1970s:effortstofosterraciallyandsocioeconomicallyintegratedcommunitiesandcombatexclusionarypractices;theriseof theenvironmentalmovementthatspur-redgrowthmanagementprograms;theuseof exactionstomakedevelopmentpayforthecostsof growth;andsharphousingcostincreases,par-ticularlyinkeyareassuchascaliforniaandWash-ington,dc.duringthe1980s,Ihbecameanim-portanttooltooffsetthereaganadministration’ssavagecutsinfederalfundingforaffordablehous-ingbypushingstatesandlocalitiestotakeamorepro-activeroleintheaffordablehousingarena. california,newJersey,andMassachusettsledthenationinIh,drivenbystatelawsenacteddur-ingthisperiodthatrequiredlocalgovernmentstoproduce,orremoveobstaclesblockingothersfromproducing,their“fairshare”of affordablehousing.outsideof thosestates,thegreaterWashington,dc,regionproducedmanyof thefirstsignificantIhprograms,notablyinMontgomeryandPrinceGeorge’scountiesinMaryland,andFairfaxandloudouncountiesinvirginia. Ihwasoriginallyatooltoprovideaffordablehousingandcreatemixed-incomecommunitiesin

suburbanareas,buttodayitisalsobeingadoptedinurbancenterssuchasdenver,Baltimore,chica-go,andnewYorkwhereredevelopment,infill,anddensification—andoftengentrification—aretakingplace.somecitiesarealsorequiringdeveloperswhoconvertrentalhousingintocondominiumstomakeaportionof theformerrentalunitsafford-abletomoderate-orlow-incomehomebuyers,extendingthereachof Ihtoexistingbuildingsaswell.ImplementingIhprogramsbecomesmoreproblematic,however,whenappliedtourbaninfillsitesandredevelopmentareas,wheredevelopmentisoftenmoreexpensiveanddifficultthaninthesuburbs,demandingparticularflexibilityindesign-ingandadministeringIhordinances. nonationalsurveyhaseverbeenconductedof Ihprograms.estimatesrangefrom300to500programsinexistenceand80,000to120,000unitsproduced(Porter2004;Brunick2007;Mallach2009).Ihmaynotbeapanaceaforthenation’shousingaffordabilityproblems,butitcanbeasig-nificant,locallybasedcomponentof anoverarch-ingstrategyinwhichthefederalandstategovern-mentsmustalsoplaysignificantroles. Ih,moreover,isnolongeranexclusiveameri-canpractice.Inrecentyearsithasspreadnotonlytocanadaandmanyeuropeancountries,includ-

F e a t u r e Inclusionaryhousing,Incentives,andlandvaluerecapture

© alan Mallach

Part of an inclusionary development in affluent suburban cranbury, new Jersey, this four-unit structure is designed to look like an expensive single-family house.

��LincoLn institute of Land PoLicy•Land Lines•J a n u a r y 2 0 0 9 J a n u a r y 2 0 0 9 •Land Lines•LincoLn institute of Land PoLicy��

ingengland,Ireland,France,Italy,andspain,butalsotosuchfar-flungplacesasIndia,southafrica,newZealand,andaustralia.theglobalspreadof Ihreflectsalargerpolicyshiftunderwhichgov-ernmentsincreasinglylooktodeveloperstoshoul-derpartof thewidersocietalcostsof develop-ment.Butwhoactuallypaysforthosecosts?

the incidence controversysinceitcanbeassumedthataffordablehousingunitswillsellorrentforbelow-marketprices,thereislittledoubtthattherearecostsassociatedwithcomplyingwithamunicipality’sinclusionaryre-quirement.Whiledevelopersoftenmaintainthatrentersorbuyersof market-rateunitsbearthecostof Ih,economistspointoutthatthedeveloperand/orthesellerof rawlandtothedevelopershould,undermostcircumstances,absorbpartorallof thesecosts.thereseemstobeagreementintheliteraturethat“inthelongrun...mostof thecostswillbepassedbackwardtotheownersof land”(Mallach1984,88). astrongargumentinsupportof thispositionisthatarationaldeveloperwillalreadychargethemaximumhousingsalepricethatthemarketcanbear,andthuswillbeunabletopassalongaddi-tionalcoststhroughhigherprices.underthose

circumstances,if newlyimposedexactionsincreasethecostof development,eitherthepriceof thelandorthedevelopers’profitswillhavetocomedown.Whiledevelopersmayreducetheirprofitmargins,itislikelythatwhereverpossibletheywillseekareductioninlandcosts.criticsof Ihmain-tainthattheserepresentunreasonableandunfairoutcomes,whileproponentsarguethatitisneitherunfairnorunreasonableforthelandownertobearmuchof thecostof inclusionaryprograms. Isthereductionof landcostsadesirableout-comeof Ih?Putdifferently,doestheimpositionof Ihactuallyreducelandvaluefromsomelevelin-trinsictotheland,ordoesitrepresenttherecap-tureof anincrementinlandvalueassociatedwithgovernmentalaction? Itiswidelyarguedthatincreasesinlandvaluesdonotgenerallyresultfromtheowner’sunaidedefforts,butratherfrompublicinvestmentsandgovernmentdecisions,andarethereforeinwholeorpart“unearned.”thisargumentisacceptedinmanyeuropeancountries,leadingtotheadoptionof regulationsthatattempttorecaptureorelimi-natewhatareconsideredtobewindfallprofitsassociatedwithlanddevelopment.ourresearch,supportedbythelincolnInstitute,hasfoundthatinmanycountriesIhisviewedexplicitlyasa

© nico Calavita

the single-family developer of the La costa Paloma apartments in carlsbad, california, was allowed to cluster the ih units and build them in collaboration with a nonprofit developer.


mechanismtorecaptureunearnedincrementsinlandvalue. Intheunitedstates,wherethe“righttodevel-op”isfarmorecentraltotheconceptof propertyrightsthanisthecaseinmosteuropeancountries,landvaluerecaptureisnotwidelyrecognizedasapartof planningpracticeandlanddevelopment.thus,theimpositionof affordablehousingobliga-tionsisoftenlegitimatizedbyprovidingcompensa-tionintheformof incentivesorcostoffsetstode-velopersfortheadditionalcostsof providingIh. ashagman(1982)hasargued,incentivessuchasdensitybonusesandothercostoffsetshavenoeffectonthepricepaidbythebuyersof marketunits,butensureinsteadthattheunearnedincre-mentsinlandvaluewillkeepflowingtolandown-ers.evenhousingadvocateswillargueforcostoffsets,if onlyasawayof gainingsupportandbluntingdevelopers’oppositiontotheenactmentof inclusionaryordinances.Incentivesandcostoffsetsprovidedtodevelopersarenotfree,how-ever,butmaycarrypotentiallyhighpubliccosts.

incentives and cost offsetsIthasbeenarguedintheunitedstatesthatwith-outincentivesandcostoffsets,“inclusionaryhous-ingbecomesaconstraintoranexactiononnew

development”(coyle1991,27–28).Forexample,thecaliforniadepartmentof housingandcom-munitydevelopment(hcd)hasadvisedforyearsagainst“theadoptionbylocalgovernmentsof in-clusionaryhousingordinancesorpolicieswhichshifttheburdenof subsidizinglow-incomeafford-abilityfromgovernmenttoprivatebuilders”(coyle1994,2).thecurrenthcdpositionisthatIhcreatesapotentialobstacletoprivateresiden-tialdevelopmentandthereforelocalitiesmustdemonstratethatIhadoptionorimplementationhasaneutralorevenpositiveimpactondevelop-ment.similarly,a2007newJerseycourtdecisionfoundthatmunicipalitiesseekingtoenactinclu-sionaryordinancesmustprovidethedeveloperswith“compensatingbenefits”tomitigatethecostof theaffordablehousingobligation (In the Matter of the Adoption of N.J.A.C. 5:94 and 5:95, 390N.J. Super. 1 (App. Div, 2007), certif. denied 192N.J. 72(2007). Inthisclimate,itisunderstandablethatlocalgovernmentsincorporatecostoffsetsorincentivesintheirinclusionaryprograms,evenintheabsenceof aclearlegaldoctrinerequiringoffsettingbene-fits.theseprogramsmayincludedensityincreasesor“bonuses,”waiversordeferralof impactfees,fast-trackpermitting,lowerparkingrequirements,

mill river house is a 92-unit mid-rise in a downtown redevelopment area of stamford, connecticut, with a �2 percent low/moderate income set aside.


© Todd Dumais, City of Stamford Land use Bureau


whicharetypicallymitigatedbyfeeswhosenatureandamountisdirectlyrelatedandroughlypropor-tionaltothedevelopment’simpact. Whenaprojectdoesnotpayitsfullcost,thecitymustmakeupthelostrevenueorallowinfra-structureorservicelevelstodecline.Ineithercase,thepublicbearsacost.Fast-trackpermitapprovalwillrequiremorepersonneltoprocesstheplanatpubliccost,orlengthendelaysforprojectsthatdonotbenefitfromthefasttrack.lowerparkingre-quirementsmightbejustifiedbytheassumptionthatlower-pricedunitsrequirelessparking,anas-sumptionthatmaynotbesupportableinallcases,andthusalegitimatecauseof concernforneigh-borhoodgroups. densitybonuses,whichareusedwidelytoin-centivizeurbandesignamenitiesaswellasafford-ablehousing,canbeboththemostattractivetothedevelopersandthemostproblematictothepublicatlarge.Whensuperimposedonanexistingplanningframework,densitybonusesraisethreemajorareasof concern.

1. theyundermineexistingregulations,effectivelyundoinglanduseplanningandzoningregula-tionswithouttheassociatedprocessesthatusu-allyaccompanyzoningchanges.alosangeles

relaxationof designstandardssuchasstreetwidthsandsetbacks,orotherregulatoryconcessionsthatsubsequentlyreducedevelopers’costs.Inaddition,financialincentivesmaybeprovidedthroughfed-eralcommunitydevelopmentBlockGrantsandhomefundsorstateandlocalsubsidies,includingbelow-market-rateconstructionloans,tax-exemptbondmortgagefinancing,andlandwrite-downs. asurveyof Ihincaliforniafoundthatlocalfinancialsubsidiesarecommonamongthemostproductivejurisdictions(nPh/ccrh2007).themostfrequentlyusedsubsidyistaxincrementfinancing(tIF),whichisallbutsynonymouswithredevelopmentincalifornia.understatelaw,20percentof alltIFrevenuesmustbededicatedtotheprovisionof affordablehousing.aftertIFfundsthemostwidelyusedincentivesaredensitybonusesandpermit-relatedconcessions,suchasdeferral,reduction,orwaiverof applicablepermitandimpactfees.somejurisdictionsalsoofferfast-trackprocessingandflexibilityof designstandards,includingheightandbulkrequirements,aswellasparkingandopenspacerequirements.Inhisnationalstudyof Ihprograms,Porter(2004,9)foundasimilarpatternwith“themostcommoncompensatoryofferingbeingdensitybonuses...althoughtheirspecificvalueinanygivenlocationisdifficulttocalculate.” studieshaveshownthatitisoftenpossibletofilltheaffordabilitygap—thedifferencebetweenwhatitcoststoprovidehousingandwhatlower-incomehouseholdscanafford—throughlocalgov-ernmentmeasuresthatreduceproductioncosts.however,developersoftenarguethatcostoffsetsalonedonotcompensatethemadequatelyforin-clusionaryrequirements.evenadditionalfinancialassistancedoesnotguaranteeacceptanceof Ihbythedevelopmentindustry.Inlargejurisdictionsinfast-growingareaswithpowerfuldevelopmentin-terests,evencostoffsetapproachescanbethwarted,particularlyduringrecessionaryperiods,astheyweremostegregiouslyinthecityof sandiegointheearly1990s(calavitaandGrimes1994). theseincentivesoftencomeatapubliccost.Financialincentivesarepaiddirectlybytaxpayers,eitherthroughappropriationsatthefederal,state,orlocallevel,orbyredirectingrevenuesthatwouldotherwisegointothecity’sgeneralfund.theeffectof feewaivers,reductions,ordeferralsisnearlyasdirect.developmentcreatesdemandsforpublicfacilities,services,andinfrastructure,thecostsof

torrey highlands, a ��-unit ih project serving families earning up to �0 percent of area median income, is in the city of san diego’s northern fringe area.

© n

ico Calavita

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citycouncilmemberopposedtoIhstated:“thisproposalautomaticallyincreasesadensityinacommunityby15percent,whichineffecttrashesacommunity’seffortstomasterplantheircommunity”(smith2004,2).

2. theymaylowerthelevelof serviceof publicfacilitiesandinfrastructureinthearea.analysisof theadequacyof publicfacilities,identifica-tionof neededimprovements,andschedulingof theinvestments—eitheronthepartof thedeveloperorthelocality—isneededtoensurethatlevelsof servicewillnotdeteriorateasaresultof theadditionaldensityassociatedwithlanduseorzoningchanges.Withoutitthequal-ityof lifeandpublicservicesinneighborhoodsaffectedbysignificantuseof densitybonusesmaydeteriorate.theseimpactsarerarelytakenintoconsideration.

3. theyfrustratecitizenparticipationintheplan-ningprocessbybeingenactedoutsideof thatprocess.onceapproved,theirimplementationispiecemeal,andtheirimpactsonlygraduallyfelt.

acriticaldistinctionmustbemade,therefore,betweendensityincreasesresultingfromanup-zoningbasedonaplanningprocessthathaspre-sumablytakenintoaccounttheissuesarisingfromanincreaseinlanduseintensity,anddensitybonusessuperimposedonexistingzoningwiththepotentialtohaveasignificantbutunanticipatedimpactonneighborhoods.thecostsimposedbydensitybonuses,aswithotherincentives,areoftenforgottenbythosewhoproposeusingcostoffsetsandincentivestosupportIh.

Land Value recapture through rezoning relianceoncostoffsetsandincentivesimplicitlyassumesastaticviewof urbanplanning—thatIhrequirementswillbeappliedwithintheexistingplanningandzoningframeworkaspartof thesub-divisionorsiteplanapprovalprocess.Withinthisframework,whilerationaldeveloperswilltrytobuythelandatpricesthatreflectthoserequire-ments,theavailabilityof costoffsetswillreducethedeveloper’smotivationtobargainwiththelandownerwho,inanycase,willnotbemotivatedtosellherlandatanylessthanthepriceshecouldgetintheabsenceof Ihrequirements.Intheend,thelandownerislikelytogetherpriceandthede-veloperhisprofits,whilethecityandtheneighbor-hoodsabsorbthecosts.allof thisreflectsthere-

luctanceof thepublicsectorintheunitedstatestoconfronttheeffectsof anyactiononlandvalues.thereisabetterway. Planningisadynamicprocess.Plansandordinancesarechangedconstantlytoreflectbothchangesinexternalconditionsandthepotentialprofittobemadefromupzoningpropertiestohigherdensityormoreprofitableuses.constantzoningchangesarearealityof theplanningpro-cessinanyareawithstrongdevelopmentdemand.Whenlanduseintensitieschangeandlandvaluesincreaseastheresultof publicaction,Ihcanbe-comeanintegralpartof thelocallanduseplan-ninganddevelopmentprocess,ratherthanbeingsuperimposedonapre-existingframework.thus,Ihcanbecomeaninstrumenttorecapturethelandvalueincrementassociatedwiththegovern-mentactionof rezoningorlandusechanges. thestateof Washingtontookastepinthisdirectionin2006inenactinghB2984,whichspe-cificallyauthorizesIhwhereitislinkedtoupzon-ings.asdescribedinonecommentary,“If acitydecidestoupzoneaneighborhood,itcanrequirethatanyonebuildinginthatareaincludeacertainnumberof affordableunits....thejustificationof thisrequirementisthatthepropertyownerhas


© Polaris Group San Francisco residential Market report

soma grand is a 2��-unit condo-minium project with 29 ih units in the south of market (soma) neighborhood of san francisco. the ih units are affordable to families making �00 percent of area median income, while the market-rate units sell for between $500,000 and $�.9 million.

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beengivenincreasedlandvaluebyvirtueof theupzone,andthatincreasedvalueistheequivalentof anincentiveunderavoluntaryprogram”(thehousingPartnership2007,5). rulesproposedbythenewJerseycouncilonaffordablehousing,whichsetsstandardsforIhintheframeworkof thestate’sstatutoryfair-sharescheme,havemovedinasimilardirection.therulesestablish“minimumpresumptivedensities”and“presumptivemaximum”Ihset-asides,rang-ingfrom22unitstotheacrewitha20percentset-asideinurbancentersto4unitstotheacrewitha25percentset-asideinareasindicatedforlowerdensityunderthestatedevelopmentandredevel-opmentPlan(newJerseycouncilonaffordablehousing2008,47–48).althoughnotexplicitlylinkingtheinclusionaryrequirementtoarezoningperse, rezoningwillbeneededinmany,if notmost,casestoachievethepresumptivedensitiesrequiredbytheproposedrules. recentnewJerseylegislationhasgoneastepfurther,mandatingthateveryresidentialdevelop-ment“resultingfromazoningchangemadetoapreviouslynonresidentiallyzonedproperty,wherethechangeinzoningprecedestheapplication...bynomorethan24months,”containaset-asideof housingaffordabletolow-andmoderate-incomehouseholds(Publiclaw46of 2008,amendingn.J.statutesann.52:27d–307).thecouncilisempoweredtosettheappropriateset-asideper-centageinsuchcasesbasedon“economicfeasibil-itywithconsiderationfortheproposeddensityof development.”althoughtheconceptisarguablyimplicitintheWashingtonstatute,thenewJerseylegislationappearstobethefirsttimethattheprincipleof “planninggain,”asitistermedintheunitedKingdom,ortherecaptureof thelandvalueincrementresultingfromrezoningforthebenefitof affordablehousing,hasbeenenshrinedinamericanlandplanninglaw. WearenotproposingthatcommunitiesdoawaywithexistingIhsystems,butratherthattherebeatwo-tieredapproach.thefirstwouldimposemod-estinclusionaryrequirementswithinanexistingzoningframework,incorporatingthoseincentivesthatcanbeofferedwithoutunduecosttothepub-lic.thesecondwouldbeassociatedwithsignificantupzoningsof eitherspecificparcelsorlargerareasgroundedintheprincipleof landvaluerecapture,imposinginclusionaryrequirementsthatinmanycasescouldbesubstantiallyhigherthanthe10to

◗ a B o u t t h e a u t h o r s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

nico caLaVita is professor emeritus in the Graduate Program in City Planning at San Diego State University. Contact: [email protected]

aLan maLLach is a nonresident senior fellow at Metropolitan Policy Program of the Brookings Institution in Washington, DC, and visiting scholar at the Federal Reserve Bank of Philadelphia. Contact: [email protected]

◗ r e f e r e n c e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brunick, nicholas. 2007. Compensatory benefits to developers for provision of affordable housing. Inclusionary housing: Lessons from the national experience. Trenton, nJ: new Jersey Council on affordable Housing.

Calavita, nico, and Kenneth Grimes. 1994. Inclusionary housing in a con-servative city: Equity planning strategies and political realities. Presented at the 36th annual Meeting of the association of Collegiate Schools of Planning. Phoenix, aZ. november.

Coyle, Timothy. 1991. Inclusionary zoning: Is it helping or hurting housing? Land Use Forum 1(1):27–28.

———. 1994. Barriers to affordable housing. Sacramento, Ca: Depart-ment of Housing and Community Development.

Hagman, Donald. 1982. Taking care of one’s own through inclusionary zoning: Bootstrapping low- and moderate-income housing by local govern-ment. Urban Law and Policy 5: 169–187.

The Housing Partnership. 2007. The ins and outs: A policy guide to inclusionary and bonus housing programs in Washington, DC. august: 5.

Mallach, alan. 1984. Inclusionary housing programs: Policies and practices. new Brunswick, nJ: Center for urban Policy research, rutgers university.

———. 2009 (forthcoming). Understanding affordable housing: Creating and preserving housing for the less affluent America. Chicago, IL: Planners Press

new Jersey Council on affordable Housing. 2008. Proposed amendments to substantive rules for period beginning June 2, 2008. Trenton, nJ.

non-Profit Housing association of northern California and California Coalition for rural Housing (nPH/CCrH). 2007. Affordable by choice: Trends in California inclusionary housing programs. San Francisco, Ca.

Porter, Douglas. 2004. Inclusionary zoning for affordable housing. Washington, DC: urban Land Institute.

Smith, Greig. 2004. Inclusionary zoning: It’s just bad planning. Council District 12 Monthly Column. City of Los angeles.

20percentrangethatisnowcustomary.aperiodof transitionmightbeappropriatetoallowlandmarketstoadjusttothenewregulatoryframework. Inconclusion,thetimehascometoreconsidertheunderlyingpremisesof Ihintheunitedstates.BygroundingIhinthepracticeof rezon-ing,webelieveitispossibletobetterintegratein-clusionaryhousingintogoodplanningpracticesandbegintorecaptureforthepublicgoodsomepartof theunearnedincrementinlandvaluesre-sultingfromtheexerciseof publiclanduseregula-torypowers.

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F e a t u r e PropertytaxationandInformality

MingZhangfaculty Profile

Dr. Ming Zhang is a visiting research fellow at the

Peking University–Lincoln Institute Center for Urban

Development and Land Policy in 2008–2009. He

has been a faculty member since 2004 in Community

and Regional Planning at the University of Texas at

Austin. Prior to joining UT Austin, Zhang worked at

Texas A&M University, the Rockefeller Institute of

Government (Albany, NY), and the Huazhong (Central

China) University of Science and Technology. He received

a Dissertation Fellowship from the Lincoln Institute in

2000–2001, and earned his Ph.D. in Urban and

Regional Planning from the Massachusetts Institute

of Technology.

Having a combined educational background in archi-

tecture, planning, and transportation, Zhang has developed

a keen research interest in land use–transportation inte-

gration. He has researched the impact of rapid mass

transit on land use, and the influence of urban form

on travel behavior. He has studied many cities, including

Boston, Houston, Austin, Dallas/Fort Worth, Hong

Kong, Beijing, Shanghai, Guangzhou, Taipei, Bangkok,

Curitiba, São Paulo, Brasilia, San Juan (PR),

and Santo Domingo.

His most recent articles appeared in such journals as

urbanstudies,transportationresearchrecord,

Journalof Planningeducationandresearch,

Journalof theamericanPlanningassociation,

and cityPlanningForum (in Chinese). He also con-

tributed a chapter on value capture in land use–transit

development to the 2007 Lincoln Institute book, urban-

izationinchina:criticalIssuesinaneraof

rapidGrowth. Contact: [email protected].

Land Lines: In which research and educational programs have you worked with the Lincoln Institute?ming Zhang:MyworkwiththelincolnInstituteismainlyintworesearchareas:planningformegaregionsandtransit-orienteddevelopment(tod),inboththeunitedstatesandchinesecontexts.teamingupwithmycolleaguesFritzsteinerandKentButleratutaustin,Ihavestudiedthetexastrianglemegaregion.Iamalsocol-laboratingwithProfessorsliangyongWuandWeijiaWuof tsinghuauniversityforresearchonmegaregionsandspatialplanninginchinawithafocusontheBeijing-tianjin-hebei(Bth)megaregion. WithsupportfromthelincolnInstitute’schinaprogram,Istudieddevelopmentaroundrailtransitstationsinmainlandchina,hongKong,andtaipei,andinlatinamericancities.Intheu.s.context,Iamconductingacasestudyof austin,texas,examiningthepotentialof todtoreducetherateof externaldrivingtrips. IamalsoinvolvedinseveralteachingprogramssponsoredbythelincolnInstitute.since2005IhavelecturedeveryspringonInfrastructuredevelopmentandPlan-ningattheInternationalcenterforlandPolicystudiesandtraining,taiwan.Participantsof theprogramcomemostlyfromlatinamerica,southeastasia,andeasterneurope.Inaddition,IhavelecturedforvariousworkshopsandresearchfellowshipcoursesorganizedbytheInstitute’schinaPrograminBeijing.

Land Lines: You mentioned the Texas Triangle as a megaregion. Is the Triangle really a megaregion or just a geometrically shaped coincidence?ming Zhang:howamegaregionisdefinedconcernsbasicconceptualandmethod-ologicalissuesincurrentmegaregionresearch.Weexploredtheseissuesthroughacasestudyof thetexastriangle,whichencompassesthemetroareasof dallas/FortWorth,sanantonio/austin,andhouston.aplanningstudiotaughtbyarmandocarbonellof thelincolnInstitute,robertYaroof theregionalPlanassociation,andJonathanBarnettof theuniversityof Pennsylvaniain2004initiallyidentifiedthetexastriangleasoneof theabouttenemergingmegaregionsintheunitedstates. sincethenvariouswaysof definingmegaregionsinoraroundthetrianglehavebeenproposed,withthenumberrangingfromnonetothree.ourstudylookedintothegrowthhistoriesandeconomicbasesof thetrianglemetrosas“spaceof places,”andanalyzedgoodsandinformationmovementsamongthemetrosas“spaceof flows.”Wealsoexaminedtheecologicalandenvironmentalinterdependencyof thesemetros.ourempiricalresultssuggestthattheyarebecomingmoreintegrated,whilethemobilityandenvironmentalchallengesfacingonemetroarealsobeingfeltbyothers.thesechallengeswilllikelyincreaseasthetriangle’spopulationisexpectedtogrowbyanadditional10millionby2050.

Land Lines: Can you share some observations on China’s plan-making in general and spatial planning for megaregions in particular?ming Zhang: chinahasaplannedeconomyinitiallyadoptedfromtheformersovietunion.Plan-makingistheresponsibilityof governmentsatthecentralandthelocallevel.thenationaldevelopmentandreformcommission(ndrc,for-merlythestatePlanningcommittee)underthestatecouncilmakesnationaleco-nomicdevelopmentplans,knownasFive-YearPlans.specificfunctionalunitsof thegovernmentdevelopimplementationprogramsthatarelargelyspatiallyorientedastheyaimtospecifythelocationandallocationof planneddevelopments. thepracticeof spatialplanninghasbeeninfluencedbythenationalurbanizationpolicyinchina,whereurbanizationisseenasboththeoutcomeandthesourceof development.spatialplanningservesasameanstoachievepolicygoals.overtime,thenationalpolicieshavebeenshiftingtheirfociasthecountryundergoesdramaticpolitical,economic,andsocialtransformation,andsince2000thispolicyhasfocusedlessonsmall-to-medium-sizedcitiesandmoreonregionsof largeurbanagglomeration.

22LincoLn institute of Land PoLicy•Land Lines•J a n u a r y 2 0 0 9

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the10thFive-Yeareconomicdevel-opmentPlan(2001–2005)stressedtheneedtointensifythe“growthengine”roleof thecountry’sthreetopmegaregions:theYangtzeriverdelta(Yrd),thePearlriverdelta(Prd),andtheBeijing-tianjin-hebei(Bth)region.the11thFive-YearPlan(2006–2010)continuedthisregionalgrowthapproachandwasinstrumentalinfacili-tatingthedevelopmentof 10to15largemegaregions.atthemegaregionseminarheldinoctober2008atthePKu–lincolnInstitutecenterwesawthatchineseplan-nershavemademanyplansaroundthemegaregionlevel.Mostchinesemegare-gionplanshavereachedabroadaudiencethroughpublishedbooks,onlinepostings,andpaneldiscussionsontvforums;theyhaveraisedpublicawarenessof challengingissuesfacingtheircitiesandregions,andencouragedparticipationof variousinter-estgroupsinshapingtheircommonfuture.

Land Lines: What have you learned from China’s megaregion development strategy that might inform U.S. initiatives like America 2050 and megaregions like the Texas Triangle? ming Zhang:themegaregioneffortintheunitedstateshastakenabottom-upapproach,incontrasttothetop-downapproachinchina.onelessonfromobserv-ingchinesemegaregionplansistheneedtomakelarge-scaleplansaspartof thecampaignfornationalspatialdevelopmentstrategies,andamerica2050mayhelptofacilitatesuchaprocess. anotherlessonisthatthefederalandstategovernmentscanandshouldplayanactiveroleinstrategicplanningandinvest-mentsintransportationinfrastructure.ahigh-speedrail(hsr)linestartedoperatinginJuly2008betweenBeijingandtianjinintheBthmegaregion,cuttingtraveltimefromtwohoursbycarto30minutesbyrail.Qualityof lifehasimprovedascitizensinbothcitiesnowcancommuteeasilytojobs,housing,andservicesinbothplaces. u.s.citiesandregionsstillrelyontheinfrastructuredatingfromthelatenine-teenthandtwentiethcenturies.Inthetexastriangleandmanyothermegaregions,majorairportsandhighwaysarereachingtheircapacities.howshouldthetexastriangle

prepareforanadditional10millionpeoplewhilemaintainingqualityof lifeandeconomiccompetitiveness?hsrshouldbeconsidered,butabottom-upapproachtowarddevelopmentof regional/nationalinfrastructuremaynotworkef-fectively.Intheearly1990s,forexample,aproposalforhsrintexasbyalocalfranchisefailedlargelyduetostrongoppositionfromsouthwestairlines.

Land Lines: Conversely, are there lessons for China?ming Zhang: chinacanlearnfromtheunitedstatestoaddressregionalgover-nanceissuesthroughcoalitionbuildingandparticipatoryplanning.currentlytherearefivelevelsof governmentsinthepoliticalgeographyof china:central,province,prefecture,county,andtownship.anotherlayeratthemegaregionlevelwillnotbehelpful.theu.s.politicalgeographyatthelocallevelisalsofragmented,butexperiencehasfoundinnovativewaystofacilitatecoor-dinationandconflictresolutionamongdif-ferentinterestgroupsandlocalcommunities. anotherlessonistoincorporatemar-ketforcesformegaregiondevelopment.asthemarketcontinuestogrowinchina’seconomy,theu.s.experienceandtech-niquesforpartneringwiththeprivatesectorarevaluablereferences.examplesincludevaluecaptureforinfrastructurefinancing,public-privatepartnershipsforpublicworks,andenvironmentalcredittrading.

Land Lines: Now please tell us more about your work with the Lincoln Institute on TODming Zhang:In2005–2006,theInstitute’schinaProgramsupportedmystudyof todexperiencesinthreemainlandcities(Beijing,shanghai,andGuangzhou)aswellasinhongKongandtaipei.Inthefol-lowingyear,theprojectextendedintwodirections:additionalcasestudiesof curitibaandsãoPaulo,Brazil;andacomparisonof bus-basedrapidtransitandrail,withrespecttotheircapitalandoperatingcosts,servicecapacity,andlanduseimpacts.IpresentedthetodstudytotheInstitute-sponsoredtodworkshopledbyProfessorrobertcerveroinshanghaiin2006.Incollaborationwithscholarsfromthecasestudycities,theresearchhasgeneratedsix

publications(oneof whichisinchinese),withothersunderreview.thistodresearchcontinuesatthePKu–lincolnInstitutecenterincollaborationwiththechinaacademyof transportationsci-enceinBeijing.Myfocusisontheapplica-tionof valuecapturetechniquesfortod.

Land Lines: Do Chinese cities need TOD, given that density is already high, mixed land use is a common practice, and the share of transit use is much higher than in the United States?ming Zhang:Yes.twoobservationsfromourinitialstudysuggestthattodoughttobepromotedinchinesecities.First,urbanexpansionsince1978hasbecomeincreas-inglyauto-oriented,andthenewbuiltenvi-ronmenttypicallyfeaturessuper-blocks,multiple-laneroadways,andstreetdesignthatishostiletopedestriansandcyclists.achineseversionof sprawlisemergingasscholarshavewarned.second,chinesecitieshavebeeninvestinginrapidtransittoaccommodatetherisingmobilityde-mand,buttherehasbeenlittletimefordetailedconsiderationof integratingtran-sitwithsurroundingfunctions.Manystationsandtheirnearbylandusesaresimplyadjacent,leavingmuchof theareadysfunctionalfortod. Whiletheu.s.principlesof todarevalidinchina,theperformancestan-dardsgenerallyarenotapplicable.MyresearchinhongKong,taipei,andtheMainlandchinesecitiesledtoanopera-tionaltodmodelcharacterizedasFive-dssquaredor5d2:differentiateddensity,dock-likedistrict,delicatedesign,diversedestination,anddistributeddivi-dends.Itemphasizesthattodshouldbeappliedasacompositepolicycombin-inglanduse,transportation,andtransitfinance(seeZhang2007).

◗ r e f e r e n c e. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Zhang, Ming 2007. Chinese edition of transit-oriented development. Trans-portation Research Record: Journal of the Transportation Research Board. Washington, DC: Transportation research Board of the national academies, no. 2038:120-127.

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new Lincoln institute Book

Increasing concerns about globalwarming,soaringgasprices,andenvi-ronmentaldegradationaretriggering

interest in sustainable development, andchina is no exception. through morethan two decades of rapid economicgrowth,china’s levelof urbanization in-creasedfrom18percentto41percentbe-tween1978and2003,anditisexpectedtoreach 65 percent by 2050. this growththreatens to produce shortages of landresources,damagetotheenvironment,andsocial inequity,allof whichposedifficultchallengesforchina’ssustainablefuture. acknowledging these problems, thechinesegovernmentinitiatedamovementcalled“scientificoutlookondevelopment,”which stresses thedevelopmentof ahar-monic society, with sustainable and bal-anced development as its basic require-ment,andcoordinatedandcomprehensivegrowthasitsfundamentalapproach.chi-nesescholars,policymakers,andplannersare asking questions such as: are smartgrowth doctrines developed elsewhereapplicable in china? are public policieseffectiveinmanagingtheproblemsassoci-ated with urban growth? are the plansefficientasinstrumentsinguidingtowardmorescientificgrowth? to help address these issues, the lin-colnInstituteof landPolicyorganizedaconferenceon“smarturbanGrowthforchina”inMay2007.Itwasthesecondina series to understand the evolution of changes taking place in china. thirteenpapersfromthefirstconferencewerecol-lected in the book Urbanization in China: Critical Issues in an Era of Rapid Growth,pub-lishedbythelincolnInstitutein2007. thisbookpresentsvariousperspectivesonshapingasustainableurbanfutureforchinabasedonconferencediscussionsof thefollowingquestions:Whatlessonscanchinalearnfromothercountriesthroughtheir experiences in combating urbansprawl?Whatarethe“dumb”growthpat-ternsthatareeconomicallyinefficient,en-vironmentallyunfriendly,orsociallyunde-sirable inchinese cities?Finally, towhatextentischina’sfragmentedplanningsys-

smart urban growth for china

smart urban growth for china Edited by yan Song and Chengri Ding2009 / 296 pages / Paper / $30.00ISBn: 978-1-55844-183-5

ordering informationContact Lincoln Institute atwww.lincolninst.edu

tem responsible foruncoordinatedurbangrowth,andhowmightitbeimproved?

contentsForeword,Gregory K. IngramIntroduction, Yan Song and Chengri DingPartI:DefiningSmartGrowthforChina1.smartGrowthandurbanization

inchina:cananamericantonictreattheGrowingPainsof asia?,Gerrit Knaap and Xingshuo Zhao

2.smarturbandesignstrategiesforsustainabledevelopmentandGrowthinchina,Dennis Frenchman

3.GreenbeltsinKorea:Implicationsforsmartlanduseregulationsinchina,Chang-Hee Christine Bae

4.Propertytaxforsustainableurbandevelopment,Chengri Ding and Yan Song

PartII:IdentifyingurbanizationDistortionsinChina5.Managingurbandevelopment

inchinesecities,Alain Bertaud,Jan K. Brueckner, and Yuming Fu

6.consequencesof landPolicyinchina:decipheringseveralemergingurbanForms,Chengri Ding

7.areFarmlandPreservationPoliciesIntelligentenoughtoProtectarablelandinchina?,Roger C. K. Chan

8.economicGrowth,Industrialization,andPopulationexpansion:Growth,Population,Industrialization,andurbanlandexpansionof china,Xiangzheng Deng,Jikun Huang,Scott Rozelle,and Emi Uchida

PartIII:MakingSmarterPlans9. PlanIntegrationforcoordinated

urbanGrowthinchina,Yang Zhang, Yan Song, and Chengri Ding

10.towardBetterPlanstoGuidesmartdevelopmentinchinesecities,Yan Song and Xiaohong Pan

11.thePhysicalandsocialdimensionsof theJob-housingBalanceinurbanchina,Jiawen Yang,Jian Feng, and Ralph Gakenheimer

12.Integratedlanddevelopment–transportationModelsforchinesecities:Where’stheFuture?,Daniel A. Rodríguez

13.choosingareasforspatialPolicyInterventions:PrinciplestoGuideIntegratedspatialPlans,Paul Cheshire

conclusion,Yan Song and Chengri Ding

◗ a B o u t t h e e d i t o r s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

YanSongisassistantprofessorinthede-partmentof cityandregionalPlanningat the university of north carolina atchapelhill.herresearchinterestsincludeeconomicsof landuseregulations,growthmanagement,andspatialanalysisof urbanform.contact:[email protected]

Chengri Ding is associate professor atthenationalcenterforsmartGrowthatthe university of Maryland in collegePark.he specializes inurbaneconomics,housingandlandstudies,GIs,andspatialanalysis.contact:[email protected]

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other educational Products

community Partnering for environmental results

this community Partnering learn-by-doing dvd packetpresentsathree-partsimulation-basedprogramdesignedtoplacetheindividuallearnerinabroadrangeof experi-

ences.thesimulationsarebasedonrealcasesthatweredevelopedwiththehelpof public sector employees who foundthemselves in each scenario chargedwith accomplishing environmental re-sults by working effectively with thecommunitygroupswhowerestakehold-ersineachsituation. developed through an initial part-nershipbetweentheu.s.environmen-talProtectionagencyandtheInstitutefor the learning sciences at north-western university, the program isnow offered to a broader group of

learnerswithsupportfromthedepart-mentof economicandcommunitydevelopmentatthelincolnInstituteof landPolicy. designedforself-directedindividualuse,thesedvdscanalsobeusedforteamlearninganddialog.thelearnerisplacedinaspecificrole(community-basedcoordinator)andlearnsbydoing.aschallengesthatmirrorreallifearise,thelearnermusttakeac-tiontoaddressthem.theprogramcontainsvideoclipsfromlocaland national environmental organizations, community groups,andtheePa.thestoriesareindexedandcross-referencedtopro-videarobust“flightsimulator”learningenvironment.Whenthelearnerrequestshelpormakesmistakes,thisvastdatabaseof ex-pertiseisavailable. theprogrampresentsthreescenariosrepresentingarangeof settings, stakeholders, environmental problems, and geographicregions,andeachisbuiltaroundaframeworkfordevelopingcom-munitypartneringskills.• evansBayinvolvesahazardouswastesiteclean-upinan

urbancommunity;• crystalcreekpresentsawesternwatershedwherethelearner

playstheroleof afacilitatorbroughtintohelpacommunityprotectanaturalresource;and

• Burnsideexploresrisingasthmaratesinabig-cityneighbor-hoodthathavetriggeredalargerdebatearoundzoning,landuse,andpublichealth.

to learn more about how the program was designed and howit canbeusedeffectivelyasa learning tool, [email protected].

2008/$10.00/dvd004toviewexcerptsandorderthedvd,gotowww.lincolninst.edu

twentieth-century new england Land conservation: a heritage of civic engagement Edited by Charles H.W. Foster

Manypartnershavebeeninvolvedoverthelastdecadeindeveloping an archive of materials documenting theevolutionof landconservationinthesixnewengland

states.coordinatedbycharlesh.W.Foster,thisbookistheculmi-nationof effortsbyvolunteercitizensandofficialsinstate,federal,andnonprofitagencieswhowerededicatedtotellingthestoryof how theyand theirpredecessorsworkedto protect the new england landscapethroughacenturyof civicparticipation. Writtenbyandaboutnewengland-ers, this book is relevant to others at-tempting to address conservation prob-lemsonaregionalbasis.thesearethestories of people acting the new eng-land way—recognizing a need, takingonaresponsibilitywithoutbeingasked,andapplyingtheYankeeattitudeinor-der to bring about tangible conserva-tiongains.Butaboveall,theaccountisoneof hopeforthefuturebecause,asthe authors document, conditions at the turn of thetwentiethcenturywereof anaturewewouldnottoleratetoday:cutandburned-over forests,erodedtopsoil,depleted farmlands,streamschokedwithrefuseandpollution,andspeciesatthebrinkof extinction.atatimeof growingconcernfortheenvironmentbothlocallyandglobally,thisbookiscertaintoinformandinspirethenextgenerationof conservationleaders. thelincolnInstitutebeganitsinvolvementwithlandconser-vation issues in new england in the early 1980s by sponsoringseminarsandlateraseriesof meetingsof thelandconservationinnewenglandstudyGroup.theInstitutehascontinuedtooffereducationalandresearchprogramsonlanduseplanningforcon-servation,conservationfinance,conservationeasements,andlandpolicyimplicationsforclimatechange.theInstituteisoneof sev-eralsupportersof thisvolume,whichwillbeavailableinFebruary.

CharlesH.W.FosterisadjunctresearchassociateandlectureratharvarduniversityKennedyschoolof Governmentandafac-ultyassociateatthelincolnInstituteof landPolicy.heformerlyserved as commissioner of natural resources and secretary of environmentalaffairsinMassachusetts,anddeanof theYaleuni-versity school of Forestry and environmental studies. contact:[email protected]

PublishedbyharvarduniversityPress2009/384pages/hardcover/$24.95IsBn:978-0-674-03289-7toorder,goto www.lincolninst.edu

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courses and conferences

theeducationprogramslistedhereareofferedasopenenrollmentcoursesfordiverseaudiencesof

electedandappointedofficials,policyadvisersandanalysts,taxationandassess-ingofficers,planninganddevelopmentpractitioners,businessandcommunityleaders,scholarsandadvancedstudents,andconcernedcitizens. Formoreinformationabouttheagenda,faculty,accommodations,tuition,fees,andregistrationprocedures,visitthelincolnInstituteWebsiteatwww.lincolninst.edu/education/courses.asp.

Programs in the united states

Wednesday–thursday, feBruary �–5Portland, oregon resolving Land use disputes Patrick field and ona ferguson, consensus Building institute, cambridge, massachusetts

thisintroductorycoursepresentspracticalexperienceandinsightsintonegotiatingandmediatingsolutionstoconflictsoverlanduseandcommunitydevelopment.throughlectures,interactiveexercises,andsimula-tions,participantsdiscussandworkwithcasesinvolvinglanddevelopmentandcommunitygrowth,designingandadoptinglanduseplans,andevaluatingdevelopmentproposals.Questionsof whenandhowtoapplymediationtoresolvelandusedis-putesarealsoexplored.

monday–friday, may �–�Phoenix, arizonathe city–cLt Partnership: municipal support for community Land trusts John davis and rick Jacobus, Visiting fellows, Lincoln institute of Land Policy, and Burling-ton associates in community development

Participantslearnaboutthekeyelementsof thecity–cltrelationshipidentifyingsomeof thecommonpitfallsandbestpracticesfromthroughoutthecountry.Participantsstudytherangeof challengesthatarisewhenlocalgovernmentschoosetosupportcommunitylandtrustsandthebestpracticesof localgovernmentstohelpcltsgrowanddevelop.thiscourseusesthelincolnInstitutepolicyfocusreportonThe City–CLT Partnershippub-lishedinspring2008.thesesessionsareofferedjointlywiththeneighborWorkstrainingInstitute.

P r o g r a m calendar

national community Land trust academy

monday–friday, feBruary ��–20atlanta, georgia

introduction to community Land trusts michael Brown, Burlington associates in community development, Burlington, Vermont

thiscourseincludescomprehensivesessionsonthenutsandboltsof thecom-munitylandtrustmodel:howarecltsstructuredandgoverned?howdotheyoperate?andwhyaresomanycommunitiesturningtocltsastheirpreferredcommunitydevelopmentandaffordablehousingstrategies?Participantslearnhowlocalcltsseektobalancetheseeminglycompetinggoalsof providinglimitedincomehomeownerswithafairreturnontheirhousinginvestmentwhileseekingtoassurethathousingiskeptaffordableforfutureoccupantsof limitedmeans.thissessionisofferedjointlywiththeneighborWorkstrainingInstitute.

financing Permanently resale-restricted homesJulie Brunner, oPaL community Land trust, eastsound, Washington

Participantsexplorevariouswaysof structuringpublicsubsidiesthatdonotinterferewiththeprivatefinancingof clthomesorunderminetheclt’sstewardshipof landandpreservationof affordability.Participantsthenexaminemortgagefinancingoptionsforclthomebuyersandlearnhowtonegotiatewithbankstosecuretermsthatprotectboththeborrowerandtheclt.Pre-requisitesforthecourseincludeafamiliaritywithsectionsof thecltlegalManualandthemodelcltgroundleasethatpertaintothefinancingof resale-restricted,owner-occupiedhousingonleasedland.

designing resale formulas and managing resalesJulie Brunner, oPaL community Land trust, eastsound, Washington

Participantslearnhowtoevaluatetheprosandconsof variousresaleformulasforthepurposeof eitherdesigninganewformulaoramendinganexistingformulatobettermeetacommunity’sneedsandpriorities.Participantsalsoexamineoptions,policies,andproceduresformanagingtheresaleof clthomesoverthelonghaul.Participantsinthiscoursemustbefamiliarwiththemodelcltgroundleaseandmusthaveaworkingknowledgeof resaleformulasandresaleproceduresthatarecommonlyemployedbyclts.

Programs in Latin america and europe

monday–friday, feBruary 9–�� rotterdam, the netherlandsLand Policy and the functioning of Land marketssaskia ruijsink, institute for housing and urban development studies (ihs), rotterdam, the netherlands

thisone-weekmodule,offeredaspartof theIhsMastercourseinurbanMan-agementanddevelopment,analyzeslandmarketsindifferentcontexts.examplesfromnorthamericanandWesterneuro-peancountriesarecomparedtodevelop-ingandtransitioncountriesincentralandeasterneurope.landmarkets,property

rights,landuseplanning,smartgrowthpoliciesandurbandensity,andinformal-ityinlanddevelopmentareaddressedthroughcasestudies,comparativeresearch,androleplaying.thismoduleisopentosomeresearchersandprofessionalswhoarenotenrolledinthemastercourse.

monday–friday, march 9–may 22rotterdam, the netherlandsLand development strategies and the future of citiesmartim smolka, Lincoln institute of Land Policy; and saskia ruijsink, institute for housing and urban development studies (ihs), rotterdam, the netherlands

thisthree-monthcourseisopentopar-ticipantsattendingtheMastercoursein

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urbanManagementanddevelopmentofferedbyIhsincooperationwitheramusuniversity,lunduniversityof sweden,rotterdamdevelopmentcorporation,andthelincolnInstituteof landPolicy.thisprogramisdesignedforinternation-alpractitioners,urbanandhousingre-searchers,policymakers,andsenior governmentstaff whowantin-depthknowledgeof landpoliciesindevelopingandtransitionaleconomies.Participantsdeveloppapersontheirowncountries,focusingonregularizationprogramsandinformallandmarkets,propertytaxa-tion,valuecapture,andlarge-scaleurbanprojects.

tuesday–Wednesday, march �0–��Bogotá, colombiacontribution of Property Valuation and improvementsoscar armando Borrero ochoa, universidad nacional de colombia, Bogotá; soraya Ximena Álvarez Bermúdez, Lonja de Propiedad raíz de Bogotá

thissymposiumforrealestatedevelop-ers,privatesectorinterests,andthegen-eralpublicpresentsbothnationalandinternationalknowledgeandexperiencesinrealestateappraisal.Fourcasesof colombiancities(Bogotá,Medellín,ManizalesandBarranquilla)willillus-tratethreethemedroundtablesonjuri-dical,technical,andurbanissuessimul-taneously.otherinternationalcaseswillbesharedtoexpandthediscussionof keyaspectsthateachcityadoptsforthecollectionof propertytaxes.

dates to Be announcedLa Plata, argentinaurban Land Lawmartim smolka, Lincoln institute of Land Policy; and maría mercedes maldonado, national university of colombia

thiscourseexaminestheconnectionsbetweenlegalsystemsandurbandevelop-mentingeneral,andthelegaldimensionsof urbanlandpolicyandmanagementinparticular.Itprovidesacriticalreviewof thetraditionalcategoriesof civillawandpubliclaw,anddiscussesthecontextandspecificsof newlegalframeworkssuchascolombia’slaw388andthecitystatuteinBraziltoaddressmajorlandpolicychallenges.

dates to Be announcedPanama city, Panama challenges to cadastre manage-ment and real estate development in central americamartim smolka and diego erba, Lincoln institute of Land Policy; Jean-roch Lebeau, association for Land and territorial manage-ment (agister), guatemala; rolando armuelles, national Land Program (Pronat), Panamá; Álvaro uribe, university of Panamá

thisseminarreviewsthecentralamericanexperienceswithcadastremanagement,includingitsrelationtonewinstrumentsof propertyvaluationandanalysisof thefunctioningof urbanlandmarkets.theseminarisgearedtolocalandnationalpublicofficials,academicians,andrealestateprofessionalsof theprivatesectorandotheragentswithaninterestinpropertyassessmentissuestoimprovethedesignof housingfinance,urbaninfra-structure,andservicesprovisionsystems.

Lincoln Lecture series

thisannuallectureserieshighlightstheworkof scholarsandpractitionerswhoareinvolvedinresearchandeducationprogramssponsoredbythelincolnInsti-tute.thelecturesarepresentedatlincolnhouse,113Brattlestreet,cambridge,Massachusetts,beginningat12p.m.(lunchisprovided).consultthelincolnInstituteWebsite(www.lincolninst.edu)forinformationaboutotherdates,speakers,andlecturetopics.theprogramsarefree,butpre-registrationisrequired.contactrsugihara@lincolninst.edutoregister.

friday, feBruary 20Property rights, titling, and regulation: an international PerspectiveBenito arruñada, department of economics and Business, Pompeu fabra university, Barcelona

Wednesday, aPriL 22 Place-Based versus People-Based community economic developmentrandall crane, department of urban Planning, university of california, Los angeles

P r o g r a m calendar

satellite image (iKonos) showing an irregular settlement of rosario, argentina (highlighted in light blue). Prepared by diego erba for use in courses on cadastre management.

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graduate student fellowship application deadlines

dissertation fellowships

The Lincoln Institute’s Dissertation Fellow-

ship Program supports doctoral students

whose work focuses on land use planning,

land markets, and land-related taxation

policies in the united States and selected

other parts of the world. The program pro-

vides an important link between the Insti-

tute’s educational mission and its research

objectives by supporting scholars early in

their careers.

The Institute will award a limited num-

ber of fellowships of $10,000 each for the

2010 fiscal year, starting July 1, 2009. To

download a copy of the application guide-

lines and forms, and to learn about the

work of current fellows, visit the Institute’s

Web site at http://www.lincolninst.edu/

education/fellowships.asp. an electronic

version of the complete application must

be received at the Lincoln Institute by

the March 2, 2009 deadline.

international student fellowships

The Institute’s Program on Latin america

and the Caribbean (LaC) will offer a new

online thesis forum to support selected

master’s and dissertation candidates dur-

ing the 2009–2010 academic year, instead

of its traditional fellowship program. appli-

cations for this forum will be accepted dur-

ing the summer of 2009, and selections

will be announced in the fall. For more

information, contact [email protected].

Through the Peking university–Lincoln

Institute Center for urban Development

and Land Policy, the China Program awards

fellowships to master’s and doctoral stu-

dents residing in and studying land and tax

policy in the People’s republic of China.

awards are given in renminbi (rMB), and

range between y20,000 and y40,000.

The application deadline is april 15, 2009.

For more information, see the Peking

university–Lincoln Institute Center Web

site: http://plc.pku.edu.cn.

Laurie Wayburn named 2009 Kingsbury Browne fellow

laurie a. Wayburn, cofounder and presi-dent of thePacificForesttrust, hasbeennamedthethirdKingsburyBrowneFellow

atthelincolnInstituteof landPolicy. “I’mdeeplyhonoredthattheworkof thePa-cificForesttrusthasbeenrecognizedwiththishonornamedforKingsburyBrowne.hesharedourpioneeringvision forsustainable forestandlandusepolicy,andourconcernsaboutconser-vationandclimatechange.healso recognizedtheimportantroleforestsmustplayaspartof aglobalwarmingsolution,”Wayburnsays.“Iamproudtobepartof anetworkof landconservationleaderswhoarecarryingonhislegacy.” Wayburnhasledstate,regional,andnationaleffortstoenactclimatechangepoliciesthatuniteconservationandmanagementwithmarket-basedincentivestoreducecarbondioxideemissions.sheistheco-authorof America’s Private Forests: Status and Stewardship(IslandPress2001),andhasreceivedboththeJamesIrvineFoundationleadershipawardandtheForestleadershipaward. thePacificForesttrust,whichWayburncofoundedandleadswithPFtManagingdirectorconnieBest,istheonlyu.s.nonprofitdedicatedexclusivelytopromotingtheconservationandstewardshipof america’sprivateforestlands,withakeyfocusonclimatestabilization.theyhavebeenleadersinthecreationof marketincentivesforlandownerstopro-tectandenhancetheirforests’abilitytoremovegreenhousegasesfromtheatmosphere.throughfinancinginnovationsandpioneeringtheuseof workingforestconservationeasements,theorganizationhasbeeninstrumentalintheprotectionof millionsof acresof forestland. KingsburyBrowneiscreditedasoneof thefoundersof america’smodernlandtrustmovement.In1980,asafellowatthelincolnInstitutehimself,Brownefirstenvisionedanationalnetworkof landtrustsandotherconservationorganizations.heconvenedconservationleadersatameetingincambridgethatledtotheformationof thelandtrustalliancein1982.theKingsburyBrowneFellowshipisawardedannuallyinconjunctionwiththeKingsburyBrowneconservationleadershipaward,whichwasannouncedbytheallianceaspartof itsnationallandconservationconferenceinPittsburghonseptember19,2008. duringherfellowshipyearWayburnwilldevelopaworkingpaperdescribingwhyandhowforestsandtheirmanagementshouldbecentraltoanyemergingpoliciesandplanstoaddressclimatechange.thisworkisintendedtohelppolicymakersunderstandthevariousrolesforestscanplayinaffectingcarbondynamics,includingthesequestrationof carboninforestsastheygrowandemissionscreatedwhenforestsarecutdownorclearedfordevelopment.thepaperwilldescribethelinkageof theforestsectorwithothercarbonemissionssectors—likeenergy,landuse,landfillsandconstruction—andtheresultantpolicyandaccountingimplications.



thelincolnInstitutecontractswithscholarsaroundtheworldtoundertakeresearchthathelps

toadvanceourinterestsinlandandtaxpolicy.thefollowingworkingpapersbasedonrecentresearchprojectshavebeenpostedforfreedownloadingonthelincolnInstituteWebsitesinceJuly1,2008.visitwww.lincolninst.edu/pubs toviewtheseandmorethan550otherpapers.

anderson,nathanB.,andthereseJ.McGuirePropertytaxationinIllinois:aFrameworkforreform

Bell,Michaele.,andcharlotteKirschnerareconnaissanceof CurrentlyavailableMeasuresof effectivePropertytaxrates

Biderman,ciroInformalityinBrazil:DoesurbanLanduseandBuildingregulationMatter?

carrión,andreaManagementof SuburbanGrowth:ChangesinLanduseandtherealestateMarketintheareaof Influenceof theNewInternationalairportof Quito,ecuador

carter,rebeccaLandusePlanningandtheChangingClimateof theWestcoulson,n.edward,andhermanlitheLandtaxIsPrettyNeutral

dantas,rubensalves,andréMatosMagalhães,Joséraimundodeoliveiravergolino,andJoséluizPortugalaSpatialanalysisof theImpactonLandPricesof urbanZoningregulationsintheCityof recifefrom2000to2006

dubin,robinForeclosuresinCleveland

england,richardW.andJu-chinhuangPropertytaxationandresidentialDensity:theoryandempirics

espino,n.arielDevelopmentof affordableHousingintheHistoricCenterof PanamaCity:SearchingforNewModelsof economicDevelopmentandSocialIntegration

haddad,emilioNewJudicialProceduresforeminentDomainCasesinSãoPaulo,Brazil

Ingram,GregoryK.NoteonMeasuringChangesinCapital/LandratiosrelatedtotaxChanges

Kaklauskas,arturas,arvydasBagdonaviciusandalbinaaleksieneFurtherDevelopmentandPracticalapplicationof Market-BasedLandMassappraisalOn-LineSystemforLandtaxation

Meffert,douglasJ.theresilienceof NewOrleans:urbanandCoastaladaptationtoDisastersandClimateChange

Perdomo-calvo,Jorge,c.a.Mendoza-Álvarez,JuancarlosMendieta-lópez,andandrésFranciscoBaquero-ruizStudyof theeffectof thetrans-MilenioMasstransitProjectontheValueof PropertiesinBogotá,Colombia

Perry,david,scottlevitan,andreBertrand,carlPatton,dwanPacknett,andlawrenceKelley360Degreesof Development:universitiesasrealestateDevelopersinatlanta

Portugal,Joséluiz,rubensalvesdantas,andJoãoFreirePradoaSpatialanalysisof theImpactof theOrlaProjectonLandPricesinPraiadeatalaia,aracaju,Sergipe,Brazil

song,Yan,andYvesZenouHowDifferencesinPropertytaxeswithinCitiesaffecturbanSprawl

uribe,MariacamilaPropertytaxinColombianMunicipalities:taxBaseandInstitutionalIssues

vandegrift,donald,andMichaellahrOpenSpace,HousePrices,andthetaxBase

thefollowingpapersarerecentenglishtranslationsof researchpreviouslycompletedandposted

inspanishorPortuguese;theoriginaldateisindicatedinparentheses.

clichevsky,nora(2001)Stateof theartonVacantLandinLatinamerica

Furtado,Fernanda(1997)Instrumentsfortherecoveryof ValueIncrementsinLatinamerica:WeakImplementation,ambiguousInterpretation

Gamarrahuayapa,Margarita(2001)experiencewiththeBettermentLevyinPeru

GarzaPuentes,nestorFernando,withJohnJairoMontañarivera,andGustavoJuncarodriguez(2000)urbanGrowthof BogotáinaSpeculativeContext

núñezFernández,ricardo(2000)urbanLandasaFactorineconomicandSocialInclusion:theexperienceof Havana

Podujecapdeville,Iván(2000)Low-IncomeHousinginChile:SerialProductionwithNowheretoGo

Quadridelatorre,Gabriel(1999)MexicoCity:urbanrevitalizationandrecyclingForSustainableDevelopment

rolnik,raquel(1999)territorialexclusionandViolence:theCaseof SãoPaulo,Brazil

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Visualizing Density Julie Campoli and Alex S. MacLean

Landscape architect and land planner Julie Campoli and aerial photographer alex S. MacLean have created a richly illustrated book to help planners,

designers, public officials, and citizens better understand the concept of density as it applies to the residential environment. also included is a CD-rOM of the Density Catalog section, including more than 1000 aerial photographs of 250 locations. 200�/��0 pages/Paper/$�9.95/isBn: 9��-�-55��-��-2

Visioning and Visualization: People, Pixels, and PlansMichael Kwartler and Gianni Longo

This book will assist urban professionals, public sec-tor leaders, and the public to navigate two complex and evolving fields: public

involvement and digital visualization as applied to plan-ning. Based on the authors’ experiences in developing sophisticated public involvement processes and applying 3D GIS-based simulation and visualization tools to plan-ning and design, the book features more than 100 color illustrations and case studies of four communities: Santa Fe, Houston, Kona (Hawaii), and Baltimore.200�/�0� pages/Paper/$�5.00/isBn: 9��-�-55��-��0-�

recent Lincoln Books on Planning and urban Formavailable at www.lincolninst.edu

Engaging the Future: Forecasts, Scenarios, Plans, and Projects Edited by Lewis D. Hopkins and Marisa Zapata

Forecasts, scenarios, plans, and projects are four ways of representing, manipulating, and assessing ideas about the future. The chapters in this richly illustrated volume offer a

variety of tools and examples for planners in situations where they are positioned to advocate for a new kind of planning—one that allows communities to face uncertain and malleable futures with continuous and deliberative planning activities. 200�/�92 pages/Paper/$�5.00/isBn: 9��-�-55��-��0-5

Planning Support Systems for Cities and regionsEdited by Richard K. Brail

This book invites the reader to join in a virtual dialogue with its authors—educators, theorists, model builders, and planners—about technology and the social context in which technology is employed. This dialogue, or per-haps dialectic, revolves around

the almost unlimited potential of computer-based tools to enhance the effectiveness of planning and the serious challenges in applying these tools within real-world plan-ning environments.200�/��2 pages/Paper/$�5.00/isBn: 9��-�-55��-��2-�

Documents

l Smart Growth for China Land Lines · u.S. policy agenda for a number of reasons. First, recent dramatic failures have highlighted the harmful effects of poor maintenance and age-related