Value Capture and Vertical Allocations of Public Amenities

Nir Mualam,Andreas Hendricks,Vida Maliene,Eyal Salinger

doi:10.3390/su13073952

Abstract

This paper describes and critically reviews an important but under-theorized value capture mechanism that we have termed “vertical allocations” (or vertical exactions). This mechanism enables cities to capture value vertically by allocating floor space for public utilities in privately owned, mixed-use, vertical development. As a value capture tool, vertical allocations allow the government to tap value uplift to supply the nearby neighborhood, and the city as a whole, with much needed public services. The owner or developer is required to make in-kind contributions in the form of spaces provided for a range of public facilities such as schools, preschools, community centers, and public medical clinics. While focusing on vertical exactions in Israel we explore how a certain share of land/floorspace can be allocated for public amenities in a given project. There are several legal pathways for securing public floorspace including negotiated agreements, land readjustment and expropriation. The findings show that unclear policies and regulations could create frictions between developers and municipalities, and these raise the nexus question as well as debates about construction costs and financial contributions developers have to make. Specifically, the paper finds that while developers often argue that cities should cover the costs of constructing public floorspace, city officials assert that the costs should be borne by the owners and developers.

Highlights

Land for public use is a vital need in any city [1] (p. 302), which is why government guidelines and legislation are applied to procure them through various policies such as land expropriation, consolidation and re-division [2,3]
With respect to vertical allocations, we ask an overarching question: do value capture instruments take into account the need to create vertical public amenities in the city? Put differently, are there value capture regulations and policies that facilitate development that integrates public and private floor space and stacks them on top of each other? we investigate several sub-questions: (1) What are the mechanisms for achieving vertical allocations, and what are their shortcomings? (2) What are the challenges for implementing vertical allocations? (3) how can future vertical allocation programs be strengthened?
The link between value capture and vertical development has not been sufficiently established by the existing literature, let alone its ability to bring together public and private amenities within the same project

Summary

Introduction

Land for public use is a vital need in any city [1] (p. 302), which is why government guidelines and legislation are applied to procure them through various policies such as land expropriation, consolidation and re-division [2,3]. Statutory planning can create value uplift that can be harnessed through value capture tools to supply a range of public benefits to the community, including land for public utilities. In this critical review we look at a unique value capture mechanism applied in the Middle East by Israeli cities. The Israeli case exemplifies a situation where city administrations utilize value uplift to create vertical communities in high-rise developments in the city center where land is scarce and prices are relatively high [7,8].

Methods

Results

Conclusion