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El caos climático afecta a personas en todo el mundo, incluidos los Estados Unidos, y ya es hora de que se haga algo al respecto. Para evitar los impactos más catastróficos de esta crisis mundial, debemos neutralizar las emisiones para el 2050, lo que implica invertir en energía limpia, usar transporte eléctrico, mejorar la eficiencia energética de los edificios y eliminar los gases de efecto invernadero de la atmósfera.

Para neutralizar las emisiones, se deberán lograr cambios sin precedentes en cuanto al uso del suelo y realizar inversiones de la misma magnitud. Por ejemplo, el Instituto de Tecnología de Massachusetts (MIT, por su sigla en inglés) calcula que se necesitan 3.237.485 hectáreas de suelo para satisfacer las demandas energéticas de 2050 de los Estados Unidos con energía fotovoltaica; es decir, solo tres veces el área de todos los campos de golf del país, 40 por ciento del área total de los techos o 16 por ciento del área que cubren las carreteras principales. Si bien no planeamos cubrir todas las necesidades energéticas de esta manera, estas comparaciones brindan la oportunidad de medir el desafío y ajustar nuestras expectativas respecto de si podemos superarlo o no. Y podemos.

En cuanto a cómo lo pagaremos, hace poco, la consultora internacional McKinsey estimó que neutralizar las emisiones costaría US$ 275 billones (casi tres veces el PIB mundial) de inversiones públicas y privadas en nuevos sistemas de energía y uso del suelo durante las próximas tres décadas, lo que equivale a US$ 3,5 billones anuales más que el gasto actual. A modo de comparación, a valores actuales, se gastaron US$ 500.000 millones en seis décadas para construir el Sistema Interestatal de Autopistas de los EE.UU., casi US$ 180.000 millones para reconstruir los países de la Organización para la Cooperación y el Desarrollo Económicos (OCDE) en las dos décadas posteriores a la Segunda Guerra Mundial, US$ 675.000 millones para financiar el New Deal (Nuevo Trato) en la década de 1930 y US$ 850.000 millones en la Ley de Reinversión y Recuperación de los Estados Unidos durante la década posterior a 2009. En otras palabras, las inversiones anuales adicionales superarán el total de estas gestiones, que solo fueron posibles una vez en la vida y que tomaron una década o más en completarse, cada una de ellas. Sin embargo, a diferencia de estos proyectos, este esfuerzo requiere contribuciones privadas significativas para apoyar una inversión pública sin precedentes.

Cuando nos topamos con desafíos financieros inabordables, como la inversión en infraestructura necesaria para servir a 2.000 millones de habitantes urbanos nuevos en las próximas tres décadas, siempre respondo con las mismas cinco palabras: la respuesta es el suelo. Desde nuestra creación hace más de 75 años, el Instituto Lincoln se centra en cómo el suelo obtiene su valor. En los últimos años, notamos un aumento exponencial del interés en el potencial que ofrece la recuperación de plusvalías, la recuperación pública de la fracción del valor del suelo correspondiente a acciones públicas. Lugares tan diversos como Seúl (Corea) y San Pablo (Brasil) han demostrado cómo la recuperación de plusvalías puede pagar necesidades de infraestructura esenciales pero que parecen imposibles de lograr. Sabemos que invertir en la descarbonización puede aumentar el valor del suelo y que esto le permite al público recuperar una fracción de este valor para pagar la inversión.

Si bien el sector público se esfuerza por recuperar su legítima porción sobre las plusvalías generadas de manera pública, los propietarios privados obtienen beneficios mayores mediante el arbitraje de información, algo que sin dudas ejerce más poder en el momento de determinar el valor del suelo. Cómo los gestores de políticas responden a la conexión entre la información y el valor del suelo, si es que lo hacen, afectará en gran medida cuánto costará neutralizar las emisiones de carbono para 2050 y cómo lo pagaremos. Esto nos lleva a una herramienta de financiamiento con base en el suelo un poco diferente que demostró ser eficaz para contrarrestar la especulación del suelo y que podría ser más rentable que la recuperación de plusvalías generadas de manera pública: el impuesto sobre la plusvalía (LVIT, por su sigla en inglés). Antes de que entremos en detalles sobre esta herramienta, centrémonos en el problema que debe abordar.

La información se encuentra en el centro de la recuperación de plusvalías privada, que suele llamarse especulación al descubierto, y lleva siglos financiando el desarrollo del suelo. Todos saben que los tres determinantes principales del valor del suelo son la ubicación, la ubicación y la ubicación. La información más relevante de la especulación sobre el suelo es el conocimiento detallado sobre lo que ocurrirá en ubicaciones específicas. En la década de 1960, Walt Disney Company usó empresas fantasma para comprar en secreto 10.926 hectáreas de humedales en el centro de Florida, a un costo promedio de US$ 200 por media hectárea, a fin de construir Walt Disney World Resort. Disney solo necesitaba 4.046 hectáreas para el desarrollo, pero sabía que la noticia de su inversión aumentaría los precios del suelo en toda la región. La empresa mantuvo en secreto sus intenciones para recuperar las plusvalías para sí, mientras negociaba con el estado de Florida el control privado sin precedentes del desarrollo en su suelo. Este acuerdo ahora está en riesgo por los conflictos políticos con el estado. Cuando se anunció el futuro desarrollo, el mismo suelo pasó a valer US$ 80.000 por media hectárea, un beneficio inesperado de más de US$ 2.000 millones por una inversión de apenas un poco más de US$ 5 millones. Disney arrendó el suelo adicional a fin de cubrir los costos de expandir las atracciones que incluyeron el parque temático Epcot, entre otras cosas.

La crisis climática y la posibilidad de extinciones en masa abrieron un nuevo frente en la especulación sobre el suelo. Informes como El cambio climático y la tierra del Grupo Intergubernamental de Expertos sobre el Cambio Climático, que documenta laboriosamente los efectos positivos y negativos del clima sobre el suelo en todo el mundo, son como un dulce para los inversionistas que buscan adquirir suelo que se beneficiará gracias al cambio climático. El suelo que tiene el privilegio de contar con recursos escasos, como el agua; terrenos más altos para aquellos que escapan de la subida del nivel del mar o hábitats críticos que son el objetivo de esfuerzos de conservación son los blancos principales de los especuladores. Irónicamente, los defensores del medioambiente fomentan, sin querer, la especulación, ya que generan estadísticas detalladas para guiar los esfuerzos de conservación o generar la voluntad política de fomentar la resiliencia ante el cambio climático que los inversionistas privados usan para su beneficio.

Dejando de lado las cuestiones éticas por un momento, las implicaciones prácticas de la especulación sobre el suelo son devastadoras. Conservar el suelo para abordar la crisis climática o las extinciones en masa ya es una propuesta costosa. Como dijo Christoph Nolte, un científico de datos socio-medioambientales de la Universidad de Boston, la Ley de Espacios Abiertos de los Estados Unidos (Great American Outdoors Act) de 2020 de US$ 4.500 millones estaba diseñada para brindar fondos suficientes, a fin de proteger el hábitat de todas las especies en peligro de extinción en los Estados Unidos. Según sus cálculos, los fondos solo protegerán al cinco por ciento del suelo necesario porque el valor del suelo ya es muy superior a lo estimado.

Cada dólar que ganan los especuladores del suelo representa un dólar más de inversión pública, privada y filantrópica que se necesitará para proteger el hábitat crítico o mitigar la crisis climática. Si los gestores de políticas tienen intenciones reales de mitigar el cambio climático o conservar el suelo y los recursos hídricos, no pueden permitir que los inversionistas privados estén 10 pasos más adelante que el público.

Hay una forma sencilla de evitar los astronómicos beneficios inesperados de la especulación sobre el suelo. Entre los muchos instrumentos eficaces sobre políticas de suelo que estudiamos, el LVIT (una herramienta conocida y probada) es la mejor solución para minimizar la especulación sobre el suelo. El LVIT, un impuesto sobre las ganancias obtenidas mediante el valor del suelo, se aplicó a tasas tan altas como el 90 por ciento en lugares como Taiwán, donde el impuesto ahora varía del 40 al 60 por ciento. La renta que genera el LVIT puede invertirse en la resiliencia ante el cambio climático o la protección del hábitat, lo que garantiza que estas plusvalías se usen para el beneficio público. Otras políticas de suelo, como las limitaciones a la propiedad extranjera del suelo que minimiza la especulación internacional, son buenos complementos del LVIT.

Para mitigar la crisis climática y evitar la extinción en masa, se requerirán cambios sin precedentes en el uso del suelo en todo el mundo. En números anteriores, comenté los esfuerzos ambiciosos para proteger el 30 por ciento del suelo y los recursos hídricos de la Tierra para 2030, y la mitad para 2050. También debemos transformar el paisaje en pos de las especies que migran por cuestiones climáticas y la producción de energía renovable. Sin medidas proactivas que minimicen el impacto de la especulación privada sobre el suelo, destruiremos las buenas intenciones públicas y vaciaremos las arcas filantrópicas antes de que podamos avanzar en la reducción del calentamiento global o la protección de las especies, incluido el homo sapiens. Ya resulta extremadamente difícil generar la voluntad política para abordar las amenazas existentes. ¿Por qué actuaríamos descuidadamente para permitir que otros aumenten el costo de nuestros esfuerzos para su propio beneficio privado? Ya sabemos que la solución para reducir la especulación sobre el suelo es un LVIT agresivo. ¿Tendremos la valentía necesaria para usarlo?

Una primera versión de este artículo se publicó en la revista Public Finance, la revista del Chartered Institute of Public Finance and Accountancy (CIPFA) con base en Londres.

Fotografía: En Hsinchu y otras ciudades de Taiwán, se utilizó el impuesto sobre la plusvalía o LVIT para contrarrestar la especulación con respecto al suelo. Crédito: Sean Pavone vía iStock/Getty Images Plus.

A coalition of 21 leading national affordable housing groups is acknowledging improvements to Fannie Mae and Freddie Mac’s Duty to Serve (DTS) Underserved Market Plans for 2022-2024 but calling on the government-sponsored enterprises to go further to reach underserved housing markets. 

The Underserved Mortgage Markets Coalition (UMMC) released a scorecard to evaluate the enterprises’ newest Duty to Serve plans, which were produced April 27. The Scorecard for the Approved DTS Plans 2022-2024 evaluates the enterprises’ commitment to innovating and developing effective solutions to meet their responsibilities under Duty to Serve, a federal regulation that requires the enterprises to prioritize and improve affordable housing finance opportunities in three historically neglected markets: manufactured housing, affordable housing preservation, and rural housing. 

The scorecard recognizes significant improvement in the latest plans compared with the versions released a year earlier. However, the scorecard finds that Fannie Mae and Freddie Mac failed to fully implement a majority of the improvements recommended in the Blueprint for Impactful Duty to Serve Plans, which the UMMC released January 20. 

For example, neither Fannie Mae nor Freddie Mac substantially increased its commitment to help manufactured housing homeowners obtain traditional mortgages, and neither adopted the recommendation to target 10 percent of their loan purchase to low- and moderate-income families in areas with high energy cost burdens. 
 
The UMMC recommends that Fannie Mae and Freddie Mac carefully consider the scorecard in determining how to improve their Duty to Serve plans, and that the Federal Housing Finance Agency (FHFA) take the scorecard into account in evaluating the enterprises’ performance. Consistent with UMMC’s intention of working collaboratively with Fannie Mae and Freddie Mac, the coalition hopes that both companies will work collaboratively to amend their DTS plans so that the UMMC can issue an updated DTS scorecard with higher scores. 

 
Founded in October of 2021, the UMMC consists of 21 leading U.S. affordable housing organizations seeking to hold Fannie Mae and Freddie Mac accountable to their founding purpose: to bring housing finance opportunities to American families not traditionally served by the private market. The UMMC identified numerous flaws in the enterprises’ previous Duty to Serve plans, released in May of 2021, and supported FHFA’s decision in January of 2022 to reject those plans. It is now working with the enterprises and other stakeholders to use the power of the federal government to improve housing affordability and boost homeownership. 

Image: Balconies of a modern apartment. Credit: ImageGap via Getty Images.

The property tax has great potential as a source of local government revenue in Asia, but its implementation has been uneven. The Lincoln Institute’s new book Property Tax in Asia: Policy and Practice provides the first comprehensive analysis of how this essential fiscal instrument has performed throughout the world’s largest continent. 

Written by a team of leading experts and edited by William McCluskey, Roy Bahl, and Riël Franzsen, the book provides a comparative analysis and detailed recommendations, with 13 in-depth case studies covering a region that is home to nearly half the world’s population. 

“Our case studies of these 13 countries and regions found that methods to modernize the property tax vary widely among them, including how they capture its advantage as a revenue-raising measure and make it an instrument for rationalizing land use policy and promoting social equity,” the editors write. 

A resource for scholars and policy makers alike, the book provides the most thorough review to date of the laws, administrative practices, reform proposals, technologies, and political debates that shape the property tax across countries of all sizes and income levels.  

The book finds that, in general, wealthier countries such as Japan, Korea, and Singapore have well-functioning property tax systems, although they face challenges—for example, unclear ownership of Japan’s growing number of abandoned homes. In China and Vietnam, which do not allow private ownership of land, local governments rely heavily on one-time land-use fees, which are less reliable and stable than recurrent taxes. In addition, many lower-income countries suffer from narrow tax bases, undervaluation of property, poor compliance, and political challenges. 

To represent roughly 50 countries, the editors selected 13 cases in based on the use of the property tax, innovative administration, use of technology, and history with the property tax. The case studies include all the largest economies in South and East Asia, all jurisdictions with recurrent property taxes of at least 1 percent of GDP, and a range of lower-income countries throughout Asia. The cases include China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Pakistan, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. 

Acknowledging that conditions vary widely, the book recommends the following 10 directions for reform: 

• Develop a property and land tax strategy 
• Take a comprehensive approach to reform 
• Clarify the different roles of national, provincial, and local government 
• Eliminate unnecessary tax exemptions 
• Simplify the tax rate structure 
• Rationalize the use of property transfer taxes 
• Improve the quality of valuations and compliance with statutory revaluation cycles 
• Improve voluntary compliance with the property tax 
• Simplify and improve public management 
• Harness the power of information technology 

Property Tax in Asia: Policy and Practice is the latest in a series of Lincoln Institute books analyzing the property tax in large regions of the globe, including Property Tax in Africa: Status, Challenges, and Prospects (2017) and Property Tax Systems in Latin America and the Caribbean (published in Spanish, 2016). 

Image: View of Mt. Fuji, Tokyo Tower and crowded buildings in downtown Tokyo. Credit: yongyuan via Getty Images.

Small and midsize legacy cities, once written off as relics of an industrial past, are important actors as climate change plays out in the United States. As much as one-third of the U.S. population lives in these metro areas, which are home to fertile farmland, abundant fresh water, productive capacity and culture, and comparatively cool weather. As climate change accelerates, these resources will attract people displaced from other parts of the country and the world. 

To succeed as “climate havens,” legacy cities must protect their assets, which also include relatively affordable housing, historic downtowns, and often overbuilt infrastructure, while simultaneously developing strategies to foster climate resilience, environmental justice, and green economic development. However, these cities face a serious threat that could undermine such efforts: large-scale speculative real estate investment that could put housing out of reach for all but the most affluent.  

Corporate and institutional investors expanded their role in the housing market more than a decade ago, picking up foreclosed and distressed properties across the country at rock-bottom prices during the Great Recession, then renting or reselling them after the recovery. Today they are consolidating even more property and power, a trend marked by rising real estate ownership by limited liability corporations (LLCs), the increasing sophistication of algorithmic tools for amassing different types of property in aggregate, and increased reliance on driving up rents, rather than house-flipping, to extract profits. Leaders in legacy cities, preoccupied with dramatic population loss for decades and enthusiastically welcoming investment now, could be caught unprepared to handle a land grab that benefits only the wealthy, displacing most everyone else—particularly Black and brown residents. 

According to the Department of Housing and Urban Development’s Rental Housing Finance Survey data, individual ownership of rental property fell from 92 percent in 1991 to 72 percent in 2017, with evidence suggesting that it has dropped further since. LLCs, which states authorized in large numbers beginning in the 1990s, account for much of this shift. They are a particularly common ownership structure for apartment dwellings of five or more units and, more recently, for single-family housing and mobile-home parks. These impersonal “equity-mining” operations convert owner-occupied housing to rentals, price out current renters with higher rents through devices such as block purchasing in targeted neighborhoods, and keep first-time homeowners off the market by reducing the available housing stock—all with virtually no accountability due to limited liability protections.  

Most of this activity has taken place in growing metropolitan areas, mainly across the South and on the coasts, but legacy cities are emerging targets. Detroit, which has slowed gutting population loss in recent years, was among the 10 U.S. metropolitan areas where private equity accounted for the highest share of purchased homes in 2021. With 19 percent of its home sales made to investors, Detroit found itself in the company of fast-growing cities including Phoenix, Las Vegas, Miami, and Atlanta.  

The predominantly Black east side of Cleveland, and the city’s eastern first-ring suburbs, have also been hit hard. Between 2004 and 2020, the proportion of housing purchases made by private equity in Cuyahoga County rose from 7.2 percent to 21.1 percent; on the east side, investor purchases stood at a staggering 46 percent by 2020. Since 2016, Springfield, Massachusetts, with a poverty rate of about 25 percent, has experienced 1,200 single-family private equity home purchases, more than any other city in the state; that figure doesn’t even include purchases of foreclosed properties. 

A number of conditions account for this housing market speculation. According to ProPublica reporting, private equity firms have record levels of unallocated capital available for real estate. Investors are also betting on a rising rental market as population outpaces housing supply. The pandemic has played a role too, leaving struggling individual landlords and owner-occupant sellers vulnerable to cash-paying private equity investors. Most housing in smaller legacy cities is single-family, which is currently targeted by private equity. And in a time-honored land-use dynamic, urban “improvements”—such as Springfield’s downtown MGM casino complex and potential East-West rail connection to Boston—tend to attract additional investment.  

Countering this speculative, wealth-extracting land grab—a damaging trend that climate change will only exacerbate, as investors eye properties expected to remain viable amid calamitous changes elsewhere—is critical to the long-term economic health of smaller legacy cities. They should consider taking or supporting steps including the following: 

• requiring greater transparency in LLC ownership, partnerships, and practices, as legislation recently filed in New York State aims to do
• ensuring that municipal housing codes require access to a local agent in charge, along with “owner” information, and provide for and/or more readily apply both criminal and civil penalties for code violations
• encouraging full implementation of the 2020 Corporate Transparency Act, which Congress passed to make ownership information reported to the U.S. Treasury Department’s Financial Crimes Enforcement Network public, so that neglectful corporate landlords can be more easily tracked and held accountable. 

Policy makers also need to remedy the structural forces that have gotten us here by increasing housing supply to meet demand, particularly at the lower end of the market; planning to preserve affordability and prevent displacement of vulnerable residents; and linking housing to community wealth-building through tools like community land trusts.  

Although much uncertainty clouds our climate future, we know many millions of people will be displaced, and the assets of smaller legacy cities will make them appealing destinations. Such cities must plan for that future now by safeguarding their land and people from the private equity invasion. 

Catherine Tumber, author of Small, Gritty, and Green: The Promise of America’s Smaller Industrial Cities in a Low-Carbon World (MIT Press, 2012) is coauthor of a forthcoming Policy Focus Report from the Lincoln Institute on greening small and midsize legacy cities in the United States. To learn more about her work, visit catherinetumber.com. 

Image: In Springfield, Massachusetts, and other U.S. legacy cities, institutional investors are muscling in on the real estate market. Credit: halbergman via iStock/Getty Images Plus.

Climate chaos is affecting people everywhere around the world, including in the United States, and it is far past time to do something about it. To avert the most catastrophic impacts of this global crisis, we must transition to net-zero emissions by 2050 by investing in clean energy, electrifying our transportation, improving the energy efficiency of buildings, and removing greenhouse gases from the atmosphere. 

The transition to net-zero emissions will require unprecedented changes in land use and encumber similarly unprecedented investments. For example, MIT estimates that it would take eight million acres of land to meet the 2050 electricity demands of the United States with photovoltaics—that’s only three times the land area of all golf courses in the country, 40 percent of the total area of rooftops, or 16 percent of land area covered by major roadways. While we do not anticipate meeting all electrical power needs this way, these comparisons give us a chance to calibrate the challenge and our expectations about whether we can meet it. We can. 

As to how we’ll pay for it, the global consulting firm McKinsey recently estimated that the transition to net-zero emissions would cost around $275 trillion (about three times the global GDP) in public and private investment in new energy and land use systems over the next three decades, an increase of $3.5 trillion annually from current spending. For comparison, in today’s dollars, we spent around $500 billion over six decades to build the U.S. Interstate Highway System, around $180 billion to rebuild OECD countries in the two decades after World War II, $675 billion to fund the New Deal in the 1930s, and $850 billion for the American Recovery Act in the decade after 2009. In other words, our additional annual investments will exceed the total of all these “once in a generation” undertakings, each of which took a decade or more to complete. But unlike those projects, this effort calls for significant private contributions to supplement unparalleled public investment. 

Whenever we’ve encountered intractable financial challenges—like the infrastructure investment needed to serve two billion new urban dwellers in the next three decades—I’ve always responded with the same four words: the answer is land. Since our inception more than 75 years ago, the Lincoln Institute has obsessed over how land gets its value. In the last few years, we’ve tracked an exponential increase in interest in the potential of land value capture—the public recovery of the share of land value attributable to public actions. Places as diverse as Seoul, Korea, and São Paulo, Brazil, have shown how land value capture can pay for essential but seemingly insurmountable infrastructure needs. We know that investing in decarbonization can increase the value of land, and that the public can then recover a share of this value to pay for the investment itself. 

But while the public sector strives to capture its rightful share of publicly generated land value, private landowners are walking away with even bigger spoils by arbitraging information, something that arguably exerts greater power in determining the value of land. Whether and how policy makers respond to the connection between information and land values will have a huge bearing on how much it will cost to reach net-zero carbon emissions by 2050, and how we pay for it. Which brings us to a slightly different land-based financing tool that is proving effective in countering land speculation and could yield even more revenue than capturing publicly generated values: the land value increment tax (LVIT). Before we delve into that tool, let’s explore the issue it’s meant to address.  

Information lies at the root of private land value capture, often called naked speculation, which has financed land development for centuries. Everyone knows the three biggest determinants of land value: location, location, location. The salient information for land speculation is advance knowledge of what will happen in specific locations. In the 1960s, the Walt Disney Company used shell companies to secretly purchase 27,000 acres of Central Florida swampland at an average cost of $200 per acre to build its Walt Disney World resort. Disney needed only 10,000 acres for the development, but it knew that news of its investment would drive up land prices for the whole region. The company kept its intentions under wraps to capture the land value increment for itself, while it also negotiated with the State of Florida for unprecedented private control of development on its lands. (That agreement is now in peril due to political conflicts with the state.) Once the future development was announced, the same land was valued at $80,000 per acre, a tidy windfall of more than $2 billion on an investment of just over $5 million. Disney leased the extra land to cover the costs of expanding its attractions to include the EPCOT center, among other things. 

The climate crisis and the prospect of mass extinctions have opened a whole new area of land speculation. Reports like the Intergovernmental Panel on Climate Change’s Climate Change and Land, which painstakingly documents both positive and negative climate impacts on land around the globe, are like catnip to investors looking to acquire land that will benefit from climate change. Land with privileged access to scarce resources like water, higher ground for those retreating from rising seas, or critical habitats targeted for conservation are prime targets for speculators. Ironically, environmental advocates unintentionally fuel speculation by producing detailed analytics to guide conservation efforts or to build the political will to promote climate resilience, only to see private investors use the data for profit.  

Leaving ethical considerations aside for a moment, the practical implications of land speculation are devastating. Conserving land to address the climate crisis or mass extinctions is already an expensive proposition. As Christoph Nolte, a social-environmental data scientist at Boston University, notes, the $4.5 billion Great American Outdoors Act of 2020 was designed to provide sufficient funding to protect the habitat for all endangered species in the United States. By his estimates, the funding will protect only 5 percent of the needed land, because land values are already much higher than estimated. 

Every dollar gained by land speculators represents an additional dollar of public, private, or philanthropic investment that will be needed to protect critical habitat or mitigate the climate crisis. If policy makers are serious about mitigating climate change or conserving land and water resources, they cannot allow private investors to stay 10 steps ahead of the public. 

There is one easy way to prevent the astronomical windfalls of land speculation. Among the many effective land policy instruments we’ve studied, the land value increment tax (LVIT)—a well-known and well-tested tool—is best for minimizing land speculation. A tax on realized unearned gains in land values, the LVIT has been applied at rates as high as 90 percent in places like Taiwan, where the tax now ranges from 40 to 60 percent. The revenues generated by the LVIT can be invested in climate resilience or habitat protection, ensuring that increases in land value are used for public benefit. Other land policies, like limitations on foreign ownership of land that minimize international speculation, are good supplements to the LVIT. 

Mitigation of the climate crisis and the prevention of mass extinction will require unprecedented changes in land use across the globe. In past issues I’ve discussed ambitious efforts to protect 30 percent of Earth’s land and water resources by 2030 and half of the planet by 2050. We’ll also need to transform the landscape to accommodate climate migrants and renewable energy production. Without proactive measures to minimize the impact of private land speculation, we will bankrupt the public weal and drain philanthropic coffers before we can make a dent in reducing global warming or protecting any species—including homo sapiens. It is hard enough to build the political will to tackle existential threats. Why would we unwittingly allow others to inflate the cost of our efforts for their own private windfalls? We already know the remedy we need to chill land speculation—an aggressive LVIT. Can we summon the courage to use it? 

A version of this article first appeared in Public Finance magazine, the journal of the London-based CIPFA (Chartered Institute of Public Finance and Accountancy). 

Image: Hsinchu and other cities in Taiwan have used a land value increment tax (LVIT) to counter land speculation. Credit: Sean Pavone via iStock/Getty Images Plus.