Urban Infrastructure Investment and Rent-Capture Potentials
In a context of rapid urbanization and energy transition, massive investments will be required to develop efficient public transport networks. Capturing the increase in land value caused by transport infrastructure (for example, through a bettermen...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/10/20300168/urban-infrastructure-investment-rent-capture-potentials http://hdl.handle.net/10986/20513 |
| Summary: | In a context of rapid urbanization and
energy transition, massive investments will be required to
develop efficient public transport networks. Capturing the
increase in land value caused by transport infrastructure
(for example, through a betterment tax) appears a promising
way to finance public transport. However, it is no trivial
task, as it is difficult to anticipate the rent creation.
This paper uses a simple city model based on urban economic
theory to compute the rent created by improvements in public
transport infrastructure in Paris, France. To apply in
places where models or data are not available, a reduced
form of the model is shown to provide acceptable
approximations of the rent creation. Simulations confirm
that land value capture can finance a significant part of
transport investments. The simulations also show that value
capture potentials are influenced by what happens in the
entire agglomeration. Simultaneous infrastructure
investments in different parts of the city play a
significant role, as they change overall accessibility
patterns. Evolutions taking place in other cities also have
a comparable influence. Non-local effects can change the
total potential for land value capture and multiply this
potential by as much as a factor of two. |
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