Abstract
ABSTRACTThe economic crisis that started in 2009 has negatively impacted in the Netherlands the available financial resources for urban development. Dutch municipalities struggle since then with falling local financial sources, especially since active public land policy, traditionally an important additional financial source, became not so profitable anymore. One supposed effect is the limited degree to which municipalities can nowadays finance public infrastructure that serves wider areas, thus more than one specific development site (i.e. ‘large’ public infrastructure). Until now, however, there are no data available that support this claim. In this paper, we explore this and the role that developer obligations can play as an alternative, compensating financial source. Developer obligations are in many countries a growing popular public value capturing instrument, but in the Netherlands, a relative new phenomenon. On the basis of surveys, interviews and policy analysis, we conclude that at least a quarter of Dutch municipalities use developer obligations to obtain financial sources for large infrastructure. This seems, however, so far not to compensate for the diminishing of other municipal financial sources. The paper ends with some speculation about the future evolvement of developer obligations in the Netherlands.
Highlights
Introduction and theoretical frameworkIn many countries, the discussions about the legitimacy and practicability of public value capture in urban development are related to a general trend of decreasing public responsibility in the financing of public goods
The decrease in the local financial sources since the economic crisis and the shift from greenfield development towards urban regeneration reinforces the need to improve the financing of large public infrastructure at the municipal level
Several recent reports discuss the need for profound legal modifications, for example, the possibility of expanding the municipal fiscal instruments (Raad van State, 2016; Rfv, 2015; Rli, 2017; Sorel et al, 2014, pp. 48–50) or the possibility of improving the Profit tax (Hobma et al, 2014, pp. 147–150)
Summary
Managerial strategies and economic liberalization. the rise of environmentalism, which has concentrated public attention on the impacts of urban development, their limitation and mitigation, fiscal decentralization towards local public bodies, the influence of multilateral agencies promoting public value capture, and other variables like, for example, prosperous real estate markets (or the opposite: real estate markets in crisis as the Dutch case discussed in this paper might prove), have contributed to this fundamental shift (Bailey, 1990, pp. 428, 431; Burge, 2010, p. 183; Callies & Grant, 1991; Crook, 2016, p. 73; Fox-Rogers & Murphy, 2015, pp. 41–43; Healey, Purdue, & Ennis, 1996, p. 144; Kirwan, 1989; Loughlin, 1981, p. 95; Monk & Crook, 2016, pp. 233–234, 237, 252–253, 256; O’Neill, 2010, pp. 5–6; Peddle & Lewis, 1996, pp. 131–132; Smolka, 2013, pp. 10–12). The conclusions, that support on surveys, interviews and policy analysis, describe the struggle to finance large public infrastructure, the extent to which and how Dutch municipalities are introducing specific policy that aims developer obligations towards large infrastructure and the results of these policies. Before addressing these topics, this section introduces first the concept and sorts of public value capture instruments internationally and second, the evolution of developer obligations in the last decennia in a country with a long tradition of using them: England. This contextualization inspires later in the conclusions (Section 5) some speculation about the possible future evolution of the Dutch developer obligations
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