As part of the American Planning Association (APA) 2003 national conference held in Denver in March, the Lincoln Institute assembled a group of planning directors from large and small western cities to discuss a set of topics they had previously identified as being important, including infill housing, maintaining the core vs. sprawling at the edge, paying for infrastructure, and transportation and land use. To explore these issues and exchange case histories, the planners met for a weekend retreat organized by Peter Pollock, Boulder’s planning director, before presenting their findings at an APA session titled “Urban Challenges and Opportunities in the Rocky Mountain West.” This report highlights key discussion points raised during both the retreat and the APA panel.

The West remains one of the fastest growing regions in the country. Not surprisingly, the liveliest discussions among western city planners center on issues of infill housing and the need to protect and maintain the viability of the urban core in the face of continued regional growth. As Chris Knight of Las Vegas noted, “protecting the core is important to the health of the entire region.” Louis Zunguze of Salt Lake City emphasized that “the core area has a real responsibility for the pace of sprawl,” adding that there is a practical need “to keep the area attractive from many perspectives.”

Neighborhood Responses to Infill Development

Part of that challenge has to do with neighborhood resistance to change and increased density. In Billings, Montana, for example (metro population approximately 100,000; county population 140,000), sprawl is becoming a significant issue, according to Ramona Mattix. Yet, despite substantial capital support for downtown revitalization and favorable zoning densities, the city faces considerable resistance from its residents, many of whom are attached to their traditional wide-open spaces.

Bill Healy of Colorado Springs (population 368,000) spoke of his earlier experience as a planner in Salem, Oregon (population 137,000), when he addressed the problem of how to “sell density” in older neighborhoods. As in Billings, the greatest opposition to infill housing in Salem, which involved rezoning established neighborhoods to accommodate multifamily housing, came from existing residents who would grow increasingly vocal if growth was slated to occur in their “back yard.” Healy explained, “The way we sold density [in Salem] was to couple it with better design standards.” People there found density much more acceptable if new development was designed compatibly with existing neighborhoods. A further benefit was that the city obtained new design standards. “Public acceptance of infill is like a sine curve,” Healy explained. “In urban areas there is great acceptance. But as you get out to the first-ring suburbs, there is a real fear of density. Way out where populations are sparce it’s not an issue.” In Colorado Springs, Healy noted, there is little economic incentive for infill. “Half our land area is vacant, so that is a disincentive for infill development. It’s an issue from a planning standpoint.”

Not all western city planners cited neighborhood opposition to infill development as a major obstacle to accommodating growth, however. Ellen Ittleson, for example, discussed Denver’s (population 555,000) recent success in “planning around resistance” in the city’s most recent plan, Blueprint Denver. While preparing the plan, the city looked at growth projections over the next 20 years and devised a way to accommodate the addition of 132,000 predicted new residents and 109,000 new jobs to the city and county. The metro area is expected to receive an additional 760,000 new residents over the same period. “Once we accepted the growth,” remarked Ittleson, “the real task became figuring out where to put it, because where the market or zoning would have put it was not acceptable.”

The Blueprint Denver plan identifies two types of infill areas. “Areas of change” are those parts of the city that would benefit from increased population densities, such as areas of economic need where land use change and transportation initiatives could go hand-in-hand with realizing mixed-use, pedestrian-oriented and transit-oriented development. The only strictly residential area of change is Cherry Creek, which is being transformed from a single-family neighborhood to one with single-family and attached housing. “Areas of stability” are represented primarily by traditional residential neighborhoods, but also include small commercial and even industrial districts where the effort will focus on how to protect the character of these areas rather than adding new households or jobs.

“There has been great consensus on where growth should be and where it should not be,” Ittleson remarked. Yet, there remains considerable controversy “at the edge, that is, how to transition from areas of change to areas of stability,” she continued. Another major obstacle facing the city’s housing initiative is land assembly. “We have the Denver Urban Renewal Authority, but it’s a politically supercharged thing to use. It’s expensive and politically complicated,” she added. Another difficulty is Denver’s “archaic legislation,” which offers far less acceptance of inclusionary zoning than in the East.

Salt Lake City (population 182,000; metro population 1 million) also has demonstrated considerable acceptance of the need for more infill and density downtown. Renowned for its abundant natural amenities, the city has a thriving tourist industry and has become a magnet for growth. As a result, land costs are very high to accommodate the new population, and there are serious discussions between the mayor, the city council and the development community on how to make the city more viable in the face of this challenge. Louis Zunguze remarked that the city is keenly aware that “what happens around us has a lot to do with what we do in the core.”

As part of its efforts to contain the pace of sprawl and attract new development to the downtown, Salt Lake City is putting together a major housing initiative and has studied downtown sites suitable for infill. With the ambitious goal of creating 40,000 new housing units in and around the downtown area, amounting to a three-fold increase in density, a considerable challenge will be to “strike a balance” with more traditional neighborhoods. Strategies include block consolidations for small subdivisions and amending the zoning ordinance to allow for more height in certain appropriate areas, “so more density can be accommodated gradually.”

Salt Lake City has considerable assets working in its favor, notably the Church of Jesus Christ of Latter Day Saints (the Mormon Church), whose world headquarters is located downtown. “The Church is a significant entity from both a social and financial standpoint,” Zunguze noted. In addition to complementing the city on key housing and economic initiatives, the Church works hard to induce corporations to relocate downtown near the Church’s own headquarters. The Church partners with new development and redevelopment in other ways as well. For example, it has built a new conference center and recently bought the Crossroads Mall located downtown (that is still taxable) and other projects as additions to Church facilities.

Cheyenne (population 53,000; county population 81,000) is the largest community in Wyoming but the smallest city represented on the APA panel and it does not have issues with infill housing. “We’re a landlocked, small community,” notes Mike Abel. “Residential areas are close by, so residential development downtown is not a huge issue right now. We’re more interested in community development issues . . . our infill focus is on commercial redevelopment.”

Regional Planning

According to John Hester, Reno (population 200,000; metro population 550,000) relies heavily on regional planning. The city has a state-mandated regional plan, updated every five years and designed to account for growth and development over a 20-year period. The recently revised plan promotes the objective of directing development to existing areas and infrastructure. It also introduces a new conceptual framework for identifying and prioritizing those districts and transit corridors most suitable for infill and development. On a broad scale the plan presents the idea of Municipal Service Areas designed to capture what has already been built and approved. Urban and suburban land uses are allowed only in these service areas. Then, within these areas, the plan identifies activity centers and auto-dependent transit corridors most suitable for high-intensity land use and development. One specific target for the city, noted Hester, “is to capture 35 percent of all regional metro housing over the next 20 years within the McCarran Ring, a four-mile radius from downtown.”

For David Richert, the cities of Phoenix (population 1.4 million; metro population 3 million) and Reno appear to share similar planning approaches toward managed growth. The Phoenix plan identifies six growth areas as overall targets for development and infill. To alleviate traffic congestion within and among the designated growth areas, the plan also recommends redirecting growth to certain strategic perimeter areas. “They become edge cities within a village system,” he explained. “There are one hundred years worth of growth in the Phoenix plan. We’re putting in infrastructure where we think growth is going to occur.” Richert noted, however, that it was important to keep in mind that “getting the infill requires getting the people who want it, too. . . . Among our goals is to get a fair share of everything that happens in the valley and to set a good example.”

Las Vegas (population 500,000; metro population 1.5 million) has been the nation’s fastest growing region for more than 60 years. But, according to Chris Knight, “the city is still young, with an outward focus and large expanses of vacant land. We tear things down if we don’t like them. If it’s bad, we just blow it up and move elsewhere. Redevelopment is difficult because some of the more prominent redevelopment tools such as eminent domain are taboo.” Downtown Las Vegas is perceived to be in trouble, and its revitalization is at the top of the mayor’s agenda. “One obstacle is that the private owners of downtown properties need to buy in on fixing the problem,” Knight explained. Another problem he noted is that “a number of downtown property owners believe they own the site of ‘the next big casino,’ so land prices are very inflated.”

The mayor of Las Vegas has been a champion of regional planning and recognizes that protecting the core is vital to the health of the region. “The mayor wants to leave the legacy of a new downtown,” Knight added. Part of that legacy would include the introduction of new medical research facilities and 40,000 units of housing to the downtown area. “Big retailers are already coming in,” added Knight, and the city is “looking for tall buildings.” The city is also beginning to investigate transportation-related development to support the existing monorail system, “but our zoning standards may be archaic and will be in the way. We have to figure out how to remove them,” he explains.

Infrastructure and Land Management

Maintaining control of a city’s services and proper fiscal strategies may help in managing growth. Salt Lake City is well endowed with transportation facilities: light rail, bus (local and Greyhound) and train (Amtrak) services, and an airport that is within ten miles of downtown. Moreover, the streets in Salt Lake are so wide that it’s easy to install new rail lines down the center for new transit services. The city also has three large malls within the downtown area, which help keep the city viable. In addition, there is considerable willingness on the part of developers “to look at the barriers in the way of the kind of the development we want downtown (i.e., mixed-use along transit),” Louis Zunguze noted. In Salt Lake, “the city development and finance communities are beginning to come to the table together to discuss what type of housing should be developed and how to finance it. . . .The banks are willing to look at new ways to finance mixed-use developments,” he noted. While work still needs to be done in terms of putting the most viable financing tools together, Zunguze cited land use regulations as the city’s major obstacle to its infill efforts. The city is faced with “contradictions of wanting to do things but the process being very slow. . . . Developers seem to have no problem assembling land, but projects are seriously challenged by the review and permitting processes,” he explained.

Reno has less than half the population of Las Vegas, but as the second largest city in the nation’s fastest growing state, growth management is a high priority. John Hester cited two other factors, in addition to strong regional planning, that have been instrumental in shaping the city’s response to growth. First is the need to work within the limitations imposed by the city’s physical constraints: Reno is landlocked and must also contend with limited water supplies. Second is the city’s concern for fiscal equity and accountability. Taxpayers subsidize growth, and the city, in consultation with outside fiscal consultants, has made concerted efforts to ensure that only those who receive municipal services pay for them, and that taxpayers in one area are not subsidizing the provision of municipal services elsewhere. “A lot of what we try to do is use the fiscal system to make people realize they can’t keep building out,” says Hester. He also noted that the city has a unique tax structure that enables depreciation.

David Richert considers the situation in Phoenix to be very similar to that in Reno only on a bigger scale. “We have our land constraints—the Indian reservations . . . and the state trust lands. Only 13 percent of the State of Arizona is in private hands,” he explained. However, the city itself has no constraints on water. “Phoenix is in the business. It sells water to other communities,” he noted. But controlling the allocation of water “provides a measure of growth control in other areas. In Arizona, you need a 100-year water supply for everything you do.”

Phoenix is also trying to achieve “a balance of transportation,” with efforts to enhance existing transportation rather than building new. Greenspace planning is also becoming increasingly important within the Phoenix region. As an example, Richert cited the recent introduction of special zoning for drainage washes and meanders. The city also passed a bill to collect taxes to pay for park acquisition. “It won’t be enough,” he added, “because once you start buying land you create a market. Land values go up and you can’t buy as much.”

Cheyenne is a city poised for change. As the “northern anchor” of the Colorado Rocky’s Front Range, Cheyenne is only 90 miles from urban Denver. Because of its strategic location on north-south and east-west highways and railroad lines, the city is looking to capitalize on its potential as a major regional transportation hub. “Regionally, we have a lot going for us as a transportation center. Businesses are looking at Cheyenne because of its proximity to other major centers,” Abel explained. Moreover, for businesses Wyoming has a very attractive tax structure, and Cheyenne is also proving popular for commercial development because it is “ready to build.” The city has many greenways, and the strong pedestrian orientation within the community is appealing to new development and infill initiatives. Already, Abel stated, “once-vacant city blocks are beginning to change, and there’s a new parking structure downtown.” Growth is not without obstacles, however. Specifically, water will be the limiting factor in the city’s growth cycle. Like many western cities, noted Abel, “we’re dependent on our water resources and future enhancements. Without sufficient snowpack to balance out the high mountain reservoirs during a drought situation such as we have now, Cheyenne could be out of water in less than three years.”

Despite this sobering prospect, the city remains more than optimistic about its future. Recently, a local property owner offered the city a massive 17,000-acre ranch that appears to have several water sources, and with them significant development capability. The city has taken the option to purchase the ranch for its water rights, but the city would acquire both the land and its water. “With this purchase, we could double the size of Cheyenne overnight,” exclaimed Abel, adding that “it will force the city to look differently at land use in the area for commercial and urban development. It’s an opportunity to develop the next generation of Cheyenne.” David Richert commented, “17,000 acres is huge. . . . You’ll need a lot of expertise from the private sector. But you’re doing a very progressive thing; your government has a chance to control development.”

Armando Carbonell is a senior fellow and cochairman of the Lincoln Institute’s Department of Planning and Development, and Lisa Cloutier is a research assistant in the department.

photo:

Participants in the Lincoln Institute-sponsored retreat for planning directors of western cities: Top row, from left: Mike Abel, Cheyenne; Bill Healy, Colorado Springs; Chris Knight, Las Vegas; John Hester, Reno. Middle row: Louis Zunguze, Salt Lake City; Ramona Mattix, Billings; Ellen Ittleson, Denver. Bottom row, from left: Armando Carbonell, Lincoln Institute; David Richert, Phoenix; Peter Pollock, Boulder. Photo credit: Lisa Cloutier

After spending more than a decade on restructuring central-provincial fiscal relations, the Chinese government is advancing its efforts to reform local public finance. In 2003 the central government issued a directive to ameliorate the real property tax system in China. To fulfill this mandate, tax authorities are reviewing international property taxation experiences, sending officials overseas to study pertinent models and inviting foreign experts to China for consultation. Yet comparable cases from which the government can draw relevant lessons for tailor-making a Chinese property tax system are few. The danger is that when public officials are under pressure to move the reform forward, they may be tempted to adopt concepts that do not match the country’s conditions.

One recent proposal that may develop into such a scenario is to establish an ad valorem property tax system in which leasehold land would be taxed as if it were freehold. This article explains what the Chinese government’s current proposal entails, why it may not be consistent with existing land tenure arrangements and, more tentatively, how the establishment of a land rent system could mediate potential contradictions of taxing land that is not private property.

China’s Property Tax Reform Proposal

The Chinese property tax system currently has as many as nine property taxes, depending on the definitions (see Hong 2003; 2004). The central government has proposed to consolidate three of these taxes into a single levy to simplify the existing tax structure. One of them is the Township and Urban Land Use Tax (LUT), which all land users (except foreign entities, government and nonprofit agencies, and agricultural industries) are required to pay. To collect this tax, local governments divide their jurisdictions into different taxing zones according to population size or land use. Land in different zones is taxed at an array of tax rates preset by the central government, ranging from 0.2 to 10 yuan per square meter (1 yuan = US$0.122). Some Chinese officials have admitted that the tax rates for the LUT have been set too low; hence its collections have little impact on local revenue. The government plans to eradicate this tax.

The other two taxes, the Building (or House) Tax and Urban Real Estate Tax (URET), will also be subject to reform. While the Building Tax is imposed on income-generating properties held by Chinese nationals, the URET is levied on all real estate owned by foreign entities and overseas Chinese. Both are ad valorem taxes whose bases can be the discount original purchasing cost, assessed capital value or gross annual rental value of the property.

When the assessed capital value (or the purchasing cost for the Building Tax) is used as the basis for tax assessment, the tax rate is 1.2 percent for the Building Tax and 1.5 percent for the URET. If an estimated rental value is used instead, the tax rates for the Building Tax and URET will be 12 and 15 percent, respectively. In some locales, like Beijing, if actual rental value is available because individual property owners rent their dwellings to another party at the market rate, the Building Tax rate will be 4 percent of gross rental income of the property. In view of this discrepancy in taxing local- and foreign-owned real estate, the government would replace these two levies with a single property tax as part of the upcoming reform.

The proposed new property tax would be imposed on both land and buildings at a uniform rate. The tax base would encompass all properties, domestic and foreign, located in rural as well as urban areas. As some public officials argue, a standardized property tax could have at least three advantages. First, the new property tax system may ease tax administration. Instead of administering the collection of the LUT, Building Tax and URET separately, local tax bureaus will be able to concentrate their effort on just one tax.

Second, the new property tax would be a value-based tax, which allows the government to capture future land value increments if property reappraisal can be done regularly. Third, one key purpose for creating the new property tax is to convert selected real estate development charges into a unified tax. Many scholars argue that some local governments might have abused the current system of user charges, thereby making payments for public services unduly cumbersome.

Collecting these charges through the new property tax may lower the transaction costs of doing business. As well-intentioned as the proposal may sound, policy designers might have underestimated the importance of one fundamental matter: the integration of the new property tax system with the current land tenure arrangements.

Property Taxation and Public Leaseholds

As specified in the Chinese Constitution, urban land is owned by the state and rural land is owned by collectives. Local governments, empowered by the state, can assign land use rights to users through a set of leasing arrangements. Lease terms are 40 years for commercial land, 50 years for industrial land and 70 years for residential land. If a local government wants to lease an urban land site to a private entity, it must be assigned through a bidding process. The winning bidder must pay the total set of leasing fees (including a “conveyance fee,” expropriation costs if land is acquired from the collective, and various land allocation charges) in a lump sum and immediately to obtain the land use rights.

The payment of the market-determined conveyance fee allows the lessee to transfer or rent the land use rights to another party and to use them as collateral. In the past, land rights were allocated mainly to private entities through negotiation, but this method failed to collect proper fees due to personal connections or corruption and it was suspended by the central government in 2002.

Users of land assigned administratively to public agencies or state-owned enterprises are not required to pay the conveyance fee, but must compensate the state for any allocation costs. The assignment of the land rights has no term limit. According to the law, if a state-owned enterprise wants to transfer its land rights to a private entity for commercial purposes, it must pay the conveyance fee to the state before doing so. For the transfer of rural land into urban uses or to nonmembers of the collective, the state will first expropriate the land from the collective with compensation and then lease the use rights to interested users for the payment of the conveyance fee and other leasing charges.

Owing to a long bureaucratic process and high transaction fees, many users have transferred their land rights to other parties without going through the proper procedure and registration. As such informal exchanges have gained in popularity, the official land leasing record is no longer reliable. Hence, any future attempt to identify the actual landholders, delineate their land rights, and estimate the leasehold value for tax purposes would no doubt be a difficult task.

The design of the new property tax system must take these unique land tenure arrangements into consideration. Aside from the extensive informality involved in land transaction and possession—a topic that is beyond the scope of this article—the most basic question is: How can the government convince lessees to pay property tax on lands that they do not own?

Certainly not all property tax systems are based on the premise that property owners should be taxpayers; occupiers are sometimes liable for tax payment. In some countries, such as Australia, the Netherlands and United Kingdom, taxes paid by occupiers are referred to as rates, a council tax or a user tax to avoid any confusion. Despite the different names, the calculation of these levies is still based on either the capital or rental value of the property, which is the same approach as for the property tax.

More fundamentally, since the supply of land is fixed, the landowner (the state government in the case of China) would bear the ultimate tax burden even if land users paid the property tax directly to the government. This is because the new tax would dampen the demand for land use rights and in turn reduce the fees that local governments could receive from leasing public land.

Because the Chinese government is both the landowner and property tax collector, lessees who leased land in the past and paid the entire leasehold value without anticipating the additional property tax burden would wonder why they should pay more land tax to the government. Thus it is essential to have a rationale for taxing leasehold land, so as to convince lessees to comply with their property tax obligation.

One way to analyze the matter is to treat property rights as a bundle of rights, which includes the right to own, use, develop, transfer, bequest and benefit from land. This bundle also comprises the right to exclude others from enjoying these privileges.

Viewing the Chinese land tenure arrangements through this lens, the government holds the ownership of land and leases other attributes of the bundle of land rights to private entities. So long as the privileges and obligations of holding the leased land rights are fully delineated and recognized, both legally and by the society, there is no reason why leasehold rights cannot be regarded as private property of the lessees for a specific period of time as stipulated in the lease.

In 1988 the Chinese National People’s Congress amended the Constitution to acknowledge the transferability of the right to use land. Further amendments are needed to explicitly recognize leaseholds as private property and empower the state to establish special legislation for the enforcement and protection of leasehold rights. In this way, the implicit contradiction in imposing property tax on leased public land would be clarified and resolved.

One technical issue remains, however: valuation of leasehold rights for tax purposes. Since the new property tax will be value-based, assessors will face the challenges of estimating the leasehold value of land independently, based on market data that normally reflect a combined value of land and all improvements. Most property valuation methods presume that land is freehold, and that developed real estate markets are present. Neither of these assumptions can be applied to China. Although there are practices that separate land and building values for tax purposes, the divisions are generally based on crude assumptions. How can assessors modify the existing (or invent new) valuation techniques to accommodate these special Chinese conditions?

More important, leasehold value is highly sensitive to the lease term and conditions, both of which can vary significantly from one case to another. At this moment, time-tested mass appraisal techniques for assessing large numbers of leasehold sites do not exist. Do these issues imply that property assessment for tax purposes under the Chinese leasehold system requires a case-by-case approach? If so, do local governments have the capability to carry out such detailed property appraisals for the collection of the new property tax? The Chinese government must find ways to deal with these practical matters if it decides to tax leasehold rights as private property.

It is also extremely important to educate would-be taxpayers and public officials about the distinctions between freehold and leasehold systems. Lessees must recognize that they possess only the leased land rights that are not designed to last in perpetuity. If the rights and obligations of both the state and lessees are not clearly delineated, taxing leasehold rights as if they were freehold could complicate the implementation of future land and tax policy. For example, in Canberra, Australia, and Israel, lessees are requested to pay the entire leasehold value up front, and thereafter they pay an annual property tax (or rates in Australia) for leasing public land. Lease terms in both cases are long and renewable—99 years in Canberra and 49 years in Israel with four automatically renewable terms totaling 196 years.

This method of collecting leasehold charges and taxes is tantamount to the payment system for land in countries where land is freehold. Due to this similarity, lessees have developed the perception that land is privately owned (Hong and Bourassa 2003). This view, albeit legally a fiction, has engendered the expectation that any government’s attempt to exercise its rights as the landowner to retake land for public uses or to demand additional payments from lessees for enlarging or extending land use rights would constitute an infringement on private property.

This expectation has added conflict to government efforts to redistribute land and land value between private landholders and the state on behalf of the public. As Neutze (2003) argued, had the Canberra government provided enough public education about its leasehold system, it would have spared the Australian capital from many intractable disputes over land ownership.

The Chinese government has no immediate plan to give fee simple deeds to private landholders. Thus, if local governments continue to collect all leasehold charges up front and then levy the new property tax on both land and buildings, they may be at risk of creating the same mistaken expectations, that is, that land is privately owned. This may put the government and lessees at odds with each other when there is a later need to reallocate land from private to public uses. Designing a real property tax that will not add more complications to the already unsettling land tenure system is a critical task that policy makers should not overlook.

Land tenure reform is a long, controversial process, however, and the Chinese government would be ill-advised to delay the implementation of the new property tax system until land reform is completed. What the government needs is a transition system in which property tax reform can proceed as planned without interfering with its endeavors to restructure land ownership. Establishing a land rent system seems to be an option.

Land Rent System

Under a land rent system, leasehold charges would be paid in the form of an annual land rent, not a one-time leasing fee. Local land bureaus could continue to assign land use rights by public auction, but the bidding would be to determine the amount of annual land rent. Similarly for lands that were assigned to state agencies administratively, users would pay their conveyance fee for transferring land rights to other private parties in annual installments, which would be equivalent to the yearly rental payments. The land rent system has pros and cons (see Hong 2004 for a detailed discussion); four important advantages are discussed here.

First, collecting a land rent is the most straightforward way to characterize the landowner-tenant relationships between the state and lessees. More important, requesting lessees to make their rental payments annually would serve as a constant reminder of their leasehold relationships with the state.

Second, if leasehold charges were paid in annual installments, local officials would no longer be able to generate a large amount of cash instantly to cover short-term fiscal shortfalls. This in turn may lower their incentive to lease land rapidly—a major malady of the current land leasing system.

Third, research using the input-output (I/O) technique and the 1997 I/O Table of China found that collecting land rent could facilitate the transition to the new property tax system (Hong 2004). Had the central government required all land users to pay an annual land rent in 1997, rental income would have added 29.8 billion yuan (US$3.6 billion) to the government treasury, representing a 2.9 percent increase in total tax revenue (see Table 1). This revenue increase would represent a net gain over estimated tax revenue losses under the proposed property tax reform.

The land rent system, however, may generate a cash flow problem for local governments. When leasing fees are deferred and paid by lessees in annual installments, fewer funds would be immediately available for local governments to cover public expenditures. To resolve this problem, local jurisdictions may borrow money from the central government or other financial intermediaries, using perhaps the future land rent collections as collateral. Loans would then be repaid in annual installments by funds gathered from yearly rental payments made by lessees.

Had the government decided to keep the total tax revenue approximately the same, it could have set the new property tax rate at 4 percent, which is the same as the Building Tax rate for personal dwellings rented at market prices, and then discounted the land rent by as much as 47 percent (see Table 1). With a reasonable tax rate and a substantial reduction on rental payment, taxpayers would be less resistant to the reform.

Table 1 also shows several possible combinations of rent level and property tax rate to produce a revenue-neutral shift. If the government were to increase the new property tax rate to deepen the tax reform, it could lower the rent level to avoid antagonizing taxpayers. This approach would provide local governments with an array of options to adopt the new property tax system in stages and at a pace that suits their economies.

Fourth, the proposed land rent system could keep future tenure choices open. If the sociopolitical sentiment of the country favors public leaseholds, local governments could continue to levy the land rent and property tax at the ratio that matches local needs. Subsequent adjustments to the rent-tax ratio could also be made when new circumstances arise.

If central authorities, in response to popular demand, were to grant fee simple deeds to all lessees, it could order local governments to phase out the collection of land rent and raise the new property tax rate accordingly. As shown in Table 1, directing the reform toward either path would not create adverse effects on local government budgets.

This analysis shows that choices available to the Chinese government are not limited to privatizing land ownership and relying solely on real property taxation to recoup land value. Undeniably, the Chinese government may eventually choose to do just that because it is indeed an option, but there are many other possibilities as well. Why, then, should the government make such a decision now, when there may be other viable alternatives that can keep all options open? Recognizing that there are many choices could unleash the creative powers of policy makers and scholars to imagine a unique Chinese system to capture land value.

References

Director General of State Statistics Bureau. 1999. Input-output table of China, 1997. Beijing: China Statistical Press.

Hong, Yu-Hung. 2003. The last straw: reforming local property tax in the People’s Republic of China. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.

_____. 2004. Assessing property tax reform in China. Report for the David C. Lincoln Fellowship Program. Cambridge, MA: Lincoln Institute of Land Policy.

_____ and Steven C. Bourassa. 2003. Why public leasehold? Issues and concepts. In Leasing public land: Policy debates and international experiences, Steven C. Bourassa and Yu-Hung Hong, eds., Cambridge, MA: Lincoln Institute of Land Policy.

Neutze, Max. 2003. Leasing of publicly owned land in Canberra, Australia. In Leasing public land: Policy debates and international experiences, Steven C. Bourassa and Yu-Hung Hong, eds. Cambridge, MA: Lincoln Institute of Land Policy.

Yu-Hung Hong is a fellow of the Lincoln Institute of Land Policy. This article reports on selected preliminary results of his research funded by the David C. Lincoln Fellowship in Land Value Taxation.

Urban regulations in Latin America that create benefits to landowners as increased gains are usually welcomed, especially by those who own land where more benefits have been concentrated; for example, when zoning plants authorize development in one area but restrain it in another, or when building codes stimulate a type of housing but condone the provision of infrastructure. But urban regulations impose charges on development, such as the provision of truck roads, the dedication of land for environmental purposes, the inclusion of social housing, the readjustment of land with neighbors, or the payment of special charges, generate strong resistance.

Across the country, decision makers at the local and state levels increasingly are turning to new methods for resolving conflicts that arise during land use decision making processes. For disputes over permitting or enforcement of local and state land use regulations, mediation is considered a reasonable alternative to at least some litigation. Although mediation has successfully resolved many land use disputes, its use typically has been applied ad hoc as inclination and resources determine.

To better understand the use of mediation across a land use decision-making system within a single state, the Consensus Building Institute (CBI) and Green Mountain Environmental Resolutions (GMER) conducted an 18-month screening and evaluation study in Vermont.

Mediation and Land Use Disputes

Previous studies by the Lincoln Institute of Land Policy and the Consensus Building Institute have demonstrated that negotiation and mediation can be effective in resolving land use disputes. A successful mediation program requires selecting suitable cases for mediation at the right time in the process, and matching them with appropriate forms of mediation assistance.

Although mediation is widely used in some areas of law, such as family or employment cases, its application in land use law has been limited. There is no systematic program or set of programs that integrates mediation into the land use permitting process at all levels, from local planning boards to state courts. Increasing the use of mediation and integrating it into the land use permit application and appeal process can reduce the burden on valuable judicial resources, save the parties time and money, and, perhaps most important, resolve disputes that otherwise could divide a community into opposing camps. This study of Vermont aimed to identify lessons that can inform the land use decision-making process in other states.

Methodology

Vermont’s manageable size, its diversity of small cities and rural towns, and the frequent use of mediation, especially at the court level, made it an ideal laboratory in which to learn how mediation might be better integrated into different levels of land use decision making. Vermont also has a strong land use planning law, Act 250, passed in 1970 to protect the environment, balance growth and development needs, and provide a forum for neighbors, municipalities, and other interest groups to voice their concerns. Depending on the nature of a proposed development project, an applicant may need to obtain permits from a local board, a regional commission, various state agencies, or federal agencies.

As in most states, land use disputants in Vermont may utilize mediation via one of two routes: when there is consensus to try it, or in court when a judge orders mediation or a hearing officer suggests mediation at a prehearing conference.

This study investigated two methods for identifying cases that might be appropriate for mediation. First, we sought to better understand action at the state court level, after other opportunities for consensus building and mediation had failed. In collaboration with the Vermont Environmental Court, CBI developed a screening and evaluation process for 285 active land use cases in the court between July 1, 2006 and December 31, 2007. Judges were asked to fill out a form to identify why and how they screened each case for mediation, and the parties were asked to complete an evaluation form after the mediation ended.

Second, GMER and CBI developed a protocol to determine whether it was possible to identify cases appropriate for mediation at both local and Act 250 levels prior to the appeal stage. Over the 18-month study period, GMER screened 54 contested Act 250 permit applications. Most cases that make their way to the Act 250 and Vermont Environmental Court dispute systems start at the local level. However, despite many efforts by GMER to identify local-level cases to be screened, only 13 local cases were reviewed.

Nine Lessons Learned

1: Screening for mediation assists with settlement.

Mediation screening—that is, evaluation of the appropriateness of mediation for a particular case—prior to proceeding with traditional avenues of land use conflict resolution is an effective tool for encouraging settlement as a general approach; encouraging mediation specifically; and distinguishing among cases that are more amenable to resolution and those that require more formal quasi-judicial or judicial decision making. Given the current barriers to mediation—lack of knowledge about mediation, jointly finding a mediator, and simply communicating with the opposing party—screening is an effective tool to increase its use.

In the Act 250 cases, the act of screening itself seemed to encourage informal negotiations and settlement in some instances (figure 1). Many of the screenings were essentially informal phone mediations that included discussions of the parties’ interests and possible options to satisfy those interests.

2: Screening criteria are useful but not fully determinative.

There is no simple formula or correlation between key factors in a case and the parties’ willingness to mediate as a way to successfully resolve issues. However, the data on screening do suggest a few key criteria that are important in determining if a case is more likely to be recommended for mediation.

• Does the case turn on a particular issue of law?
• The type of case matters. Permitting cases tend to be more amenable to mediation than enforcement cases, and general commercial and residential cases are more amenable than industrial cases, especially those involving major public health or nuisance issues (e.g., noise, odor).
• The parties’ willingness to explore options and ideas is a key indicator for whether mediation is more or less appropriate.
• Timing is important. Screening is generally best done after filing (of an application or appeal) but before any formal proceedings have occurred (an administrative hearing or court hearing).

The data also suggest that some criteria are not important in determining whether mediation is appropriate for a specific case.

• Whether the parties have talked or not, or even tried to settle informally, does not indicate that the parties should not consider mediation. Surprisingly, parties in many cases had simply not communicated with one another once the case was filed, but when encouraged by a mediator or screener, they were amenable to doing so.
• The need or desire for future relationships is not an important criterion, at least as practiced in this context in this state. Most parties appear to be seeking an end to litigation and a settlement or agreement, not necessarily desiring to repair or maintain a relationship.
• The kind of issue, such as traffic, noise, visual impact, or odor, does not seem to be as important for considering mediation as the intensity and breadth of the issue’s impacts on abutters and other interested stakeholders.
• The number of parties does not appear to be a factor. A case with two parties is as likely to be mediated as one with many parties.

3: The screener’s qualifications and credibility do matter.

A mediation screener for land use disputes requires a specific skill set, knowledge base, and credibility. At the Environmental Court level, a judge’s expertise in land use issues, law, and regulatory structure allows a more informed assessment of cases amenable to mediation. Analysis of the court’s screening data concluded that the two most important factors in determining the appropiateness of mediation were the issue of law at stake and the judge’s “sense” of settlement potential. Both are professional judgments rather than more formulaic means of determining appropriateness. Furthermore, the judge’s authority gives the resulting determination legitimacy.

In a nonjudicial setting such as a permitting body, a screener without legal authority or stature can also be effective. Most parties will participate and take seriously the recommendations of the screener, as long as the screener has the express support and legitimacy provided by an official governing body.

4: Screening program design is also important for legitimacy.

As part of the research, we established and implemented the screening program for the District Commissions, entities that provide review under Act 250. This program was highly instructive because it raised several key issues. The primary question was whether screeners should be part of or separate and independent from an appropriate government agency (table 1). A secondary concern was whether a screener might also later mediate the case. Protocols can be used to avoid or minimize the perception of any potential conflict of interest.

A few survey respondents raised concern that the Act 250 screener was also available to mediate the cases screened, though the screener always provided the parties a roster of mediators from which to choose. The concerns were about ethics (Can one conduct a fair and neutral screening when one has both the economic and professional incentive to recommend mediation in order to then mediate?) and the marketplace (Is it fair to and competitive for other mediators if the screener has an “inside track” on certain cases?).

We assume that screeners as mediators may be influenced by the opportunity to mediate, if they are eligible. We would argue that this incentive is not merely financial, but also professional in the sense that one wishes to practice one’s craft. Nonetheless, countervailing arguments suggest that a strict separation of screening and mediation poses an equally difficult set of problems.

• Though mediators perhaps should not judge their professional performance by the number of cases settled, many do. As a result, there is an incentive to not recommend mediation for cases that will lower one’s success rate of settlements. No mediator likes to recommend mediation only to later fail in resolving the case.
• Screeners are likely to become better seasoned if they actually experience the results of some of their choices by later mediating them.
• Parties are likely to gain trust in a capable screener, and this allows a quicker entry into the mediation process. A screener who either provides mediation if desired or offers assistance in identifying a mediator is more efficient and can help overcome the reluctance of parties to proceed simply due to the effort of having to collaborate with the “other side” to select a mediator jointly.
• In the current practice of public policy mediation, a screener as mediator is standard practice in many cases.

5: Land use mediation may be more effective in helping parties reach a settlement than in restoring relationships.

Data gathered through the court mediation evaluation forms offer a somewhat surprising reflection on how participants value their mediation experience. While mediation is often lauded for its contributions to improving relationships among parties, evaluation survey results suggest that parties valued mediation more for its ability to make them consider options than for its impact on their relationship with other parties.

Sixty-six percent of participants reported that the mediation process encouraged them to consider various options for resolving the dispute (59 percent [154] agreed and 7 percent [18] strongly agreed). On the other hand, 42 percent of respondents felt that at the end of the mediation process they were better able to discuss and seek to resolve problems with other parties on this project (39 percent [102] agreed and 3 percent [8] strongly agreed). While one might wish, optimistically, for a mediation program that restores relationships and rebuilds social capital, it seems that participants are more interested in exploring various options for settlement than in broader social or relational goals.

6: Land use mediation may not always result in satisfying agreements, but it generally results in satisfaction with the process.

Parties support mediation and are willing to participate again, despite indications by many that their most recent experience did not result in an agreement that satisfied them. Figure 2 shows that 40 percent agreed that mediation resulted in an agreement that was satisfying to them (88 agreed and 15 strongly agreed), while 35 percent disagreed (55 strongly disagreed and 36 disagreed).

Despite these findings, when asked if they would participate in a mediation again, respondents show more varied results (figure 3). More than 50 (131) agreed and 17 percent (45) strongly agreed to participate again, while only 19 percent (30) disagreed and 7 percent (19) strongly disagreed.

We interpret these data to mean that the agreement reached was tolerable, given their constrained choices. The mediation process more often than not seems to have offered enough benefits, cost or time savings, or some other advantage that many respondents would be willing to participate again.

The evaluation process did reveal some concerns about the role of pro se parties (who represent themselves without an attorney). Some pro se parties expressed frustration with the mediation process, which they felt did not provide an adequate forum for exploring and resolving the full range of issue that concerned them. Other parties expressed their own frustration with the pro se parties, whom they felt slowed down the process and demanded too much time from the mediator. Additional research on best practices for defining and communicating the role of pro se parties could improve overall satisfaction with the mediation process.

7: Mediation of particular issues does not relieve the larger burden on municipalities to make complex decisions on land use projects.

Lower levels of satisfaction were expressed by town officials than other parties, which suggests that mediation in and of itself is not assisting local officials to the extent one might hope. Town representatives were more likely to disagree or strongly disagree (56 percent) that the mediation resulted in an agreement that was satisfying to them than were applicants (36 percent), agencies (36 percent), and interested parties (35 percent).

By the time cases, especially enforcement cases, reach the Environmental Court, town officials may feel they have already tried to accommodate applicants and thus are less enthusiastic about mediation with parties who, in their perspective, have been “recalcitrant.” A court decision, even if it adopts a mediated settlement, may not resolve an entire dispute. Mediation may resolve issues pending before the court, but does not resolve all barriers to implementation of an agreement at the local level. This finding suggests that municipalities may need more assistance, not only in mediation of narrowed issues, but also in more comprehensive consensus building or public participation efforts.

8: Encouraging mediation at the municipal level remains challenging.

The research team was not successful in instituting any systematic local approaches to screening and mediation, despite an intensive outreach effort; a no-cost screening service; the support of mediation at the Act 250 and Court levels; a state generally amenable to alternative forms of dispute resolution; and a relatively vigorous development climate during the study.

Various factors may explain this resistance. The single largest obstacle on the local level is that in most cases the permitting bodies do not know if an application will be opposed until the hearing begins. Furthermore, most applications have only one hearing day, so there is little opportunity for mediation screening. Hearings that last multiple days clearly have other options.

Other obstacles include the fact that mediation as commonly understood may be introduced too early for parties wishing to see how they might fare in the standard administrative process. Local officials may view mediation as usurping their role. The status quo of existing administrative processes may simply be considered “good enough.” Town budgets may account for potential litigation, but not be flexible enough to fund mediation. Some officials may not know enough about mediation or simply be uninformed about its benefits. There may be too few cases in most municipalities in a rural state like Vermont to establish any programmatic approach.

In any case, this study reinforced the assumption that administering mediation at the local level is difficult, however promising the “idea” of mediation may be in assisting communities and their citizens.

9: The Environmental Court can influence attitudes toward mediation.

The Environmental Court’s embrace of mediation as a key tool to its proceedings appears to have an interesting effect on municipal land use decisions, despite the challenges at the local level. It is widely perceived (though inaccurately) among local and regional land use professionals across the state that if a case proceeds to the Environmental Court it “almost always” will be ordered into mediation. The court, in fact, is quite careful about referrals. During our study period, the court referred fewer than half of its cases to mediation.

This finding points to at least two interesting implications for a more rigorous, system-wide approach to mediation and dispute resolution. First, the data suggest that a powerful land use body’s support of mediation has a meaningful impact on perceptions of mediation across the system. Second, the active support of mediation by a body such as the court has likely salutary effects on settlements that can occur earlier in the process. This also suggests that when enough of a land use system’s regulatory bodies support and encourage mediation, a culture of settlement and dispute resolution may take hold.

Conclusions

This study supports the assertion that mediation is useful in land use conflicts. Upon evaluation of nearly 300 Vermont land use cases at the local, Act 250, and Environmental Court levels, this study found that mediation screening and actual mediation are effective tools for targeting and resolving many cases. As disputes become more complex, and resources, time, and money for resolving land use disputes become scarcer, it will be important to find efficient and reliable methods for settling cases. Mediation and mediation screening hold great potential for meeting those goals.

Related Publications

Susskind, Lawrence, Ole Amundsen, and Masahiro Matsuura. 1999. Using Assisted Negotiation to Settle Land Use Disputes: A Guidebook for Public Officials. Cambridge, MA: Lincoln Institute of Land Policy.

Susskind, Lawrence, Mieke van der Wansem, and Armand Ciccarelli. 2000. Mediating Land Use Disputes: Pros and Cons. Cambridge, MA; Lincoln Institute of Land Policy.

About the Authors

Patrick Field is managing director of the Consensus Building Institute in Cambridge, Massachusetts, as well as associate director of the MIT-Harvard Public Disputes Program and senior fellow at the Center for Natural Resources and Environmental Policy of the University of Montana in Missoula.

Kate Harvey is an associate at the Consensus Building Institute.

Matt Strassberg is an director of the Environmental Mediation Center and principal of Green Mountain Environmental Resolutions based in Moretown, Vermont.

This research was made possible by the generous support of the JAMS Foundation and the Lincoln Institute of Land Policy.

La utilización de modelos computarizados en la planificación del uso del suelo y el transporte y para analizar los mercados de viviendas urbanas tiene una larga y variable historia. Una aplicación pionera de modelo computarizado a gran escala que relacionaba el uso del suelo con el transporte urbano fue el Estudio sobre el Transporte en el Área de Chicago de 1960. Este estudio utilizaba un modelo con desglose espacial que incluía una detallada red de transporte y abarcaba los clásicos pasos de uso del suelo, generación de viajes, elección de la modalidad y asignación de redes de toda la planificación de transporte urbano.

Un modelo de gran repercusión, con un enfoque más analítico para predecir patrones de uso del suelo, fue el formulado por Ira Lowry en 1964 para Pittsburgh, en el que se empleaba la teoría de base económica para distribuir la actividad económica orientada a la exportación. Luego se utilizó la distribución de residencias y empleo comunitario dentro del área metropolitana para obtener patrones de desplazamiento por razones de trabajo y compras.

A comienzos de la década de 1970 se prestó más atención a los modelos con desglose espacial para los mercados de viviendas urbanas, tales como el Modelo de Vivienda del Instituto Urbano (que representaba los cambios ocurridos en el mercado de la vivienda durante una década) y el Modelo de Simulación Urbana de la Oficina Nacional de Investigación Económica (un modelo microanalítico que proyectaba anualmente el comportamiento de los miembros de 85.000 hogares según el lugar de trabajo y la ubicación residencial). Ambos modelos se utilizaron para analizar el impacto de los programas de asignación de viviendas y se aplicaron más en el análisis de políticas que en la planificación.

A finales de la década de 1970, el énfasis se puso en el desarrollo y la aplicación de bocetos de modelos de planificación, en especial en los referidos al transporte. Aunque estos modelos seguían presentando un desglose espacial, utilizaban decenas (en lugar de centenas) de zonas de tránsito, y las redes de transporte se representaban con menor detalle. Estos modelos fueron adaptados para representar los resultados relacionados con el transporte más allá de los flujos de las redes, tales como emisiones vehiculares, exposición de la población a la contaminación del aire, kilómetros de viaje por vehículo y consumo de energía. En la década de 1980, estos modelos más pequeños pasaron a gestionarse desde computadoras centrales a computadoras personales, lo que facilitó su aplicación. Las necesidades de datos continuaban siendo muy importantes, pero muchos de los modelos utilizaban de manera más sistemática los datos provenientes de censos con desglose espacial que se encontraban disponibles, por lo que se vieron facilitadas la transferencia y la calibración de modelos entre los diferentes lugares.

En las dos últimas décadas, la llegada de sistemas de información geográfica (SIG) y el desarrollo de programas de representación visual de datos en tres dimensiones han ido transformando la manera en que se utilizan las computadoras a la hora de llevar a cabo una planificación. Los datos compatibles con SIG hoy están disponibles gracias a los satélites, las fuentes encargadas de realizar censos y las agencias gubernamentales. Los municipios locales se han adaptado rápidamente a fin de combinar sus datos catastrales con información sobre actividad delictiva, transporte y demografía, y dichos archivos de datos municipales con frecuencia se encuentran disponibles en Internet. Aunque resulta evidente que se ha incrementado la disponibilidad de datos provenientes de SIG, la gran variedad de formatos, definiciones y tipos de cobertura puede representar un desafío a la hora de combinar la información de diferentes fuentes en un conjunto unificado de datos para una región metropolitana.

La utilización de visualizaciones en tres dimensiones de datos con desglose espacial ha transformado la presentación de los datos y los resultados de los modelos. Estas técnicas, tales como los mapas en 3D a nivel metropolitano y la capacidad de “volar” a través de una calle o barrio a nivel del proyecto, facilitan la consulta popular. Además, resulta mucho más fácil para aquellos que no son especialistas comprender y participar en el proceso e interpretar los resultados de escenarios de planificación alternativos.

Junto con los avances en cuanto a los datos y a la presentación de los mismos, los programas de computación son en la actualidad más fáciles de usar y se encuentran cada vez más disponibles en plataformas de código abierto. Aunque los códigos de muchas de las primeras herramientas de planificación computarizadas han estado a disposición del público en general, la utilización de dichas herramientas generalmente ha requerido tener conocimientos avanzados de programación. A medida que una mayor cantidad de estas herramientas se presenten en formatos fáciles de usar e integradas a otros módulos, la utilización de métodos computarizados para comparar y contrastar escenarios de desarrollo alternativos se hará cada vez más accesible. De hecho, actualmente muchas agencias de planificación son capaces de usar las herramientas de planificación de escenarios con el fin de producir posibles futuros alternativos que brinden un fundamento para el debate y la consulta popular, con el objetivo de identificar cuáles son los resultados deseables y cuáles deben evitarse.

Tal como se informa en este número de Land Lines, el Instituto Lincoln apoya el uso de distintas herramientas de planificación para investigar y evaluar la efectividad de las políticas que apuntan a mejorar los resultados referentes al desarrollo del suelo.

More than two decades have passed since a government-led megaproject set out to transform Puerto Madero, the oldest sector of the port district at the mouth of the River Plate in Buenos Aires, Argentina. Once a center of decay that was hastening decline in the adjacent downtown, Puerto Madero is now a tourist icon and hub of progress, drawing in residents and visitors alike to its park and cultural amenities, housing approximately 5,000 new inhabitants, and generating 45,000 service jobs. Home to a number of new architectural landmarks—including Santiago Calatrava’s Woman’s Bridge (Puente de la Mujer) and César Pelli’s YPF headquarters—the redeveloped port has contributed to the reactivation of the city center, influencing development trends throughout the Argentinean capital.

Encompassing 170 hectares near the downtown presidential palace (Casa Rosada), Puerto Madero was one of Latin America’s first urban brownfield renewal projects of this scale and complexity. The project was conceived as part of a wider strategy for city-center development that also included changes in land use regulations, building refurbishments, and social housing in heritage areas. This article draws on two decades’ worth of evidence and experience with the project to examine the extent to which Puerto Madero has achieved its central objectives: to contribute to the reversal of undesirable development patterns in the city, assert the downtown as the eminent center of Buenos Aires, stimulate the local economy, and improve the living conditions of all porteños.

The Port in Crisis

Puerto Madero was abandoned as a port at the beginning of the 20th century, when operations transferred to Puerto Nuevo. By the late 1980s, Puerto Madero had suffered several decades of neglect and underutilization. The federal General Administration of Ports owned the land, but the city and national governments both had jurisdiction over planning. Similarly, greater Buenos Aires—home to 35 percent of Argentina’s population and producer of 46 percent of its GDP—is governed by an overlapping set of institutions that often have trouble coordinating. To simplify this inter-jurisdictional governance, a public limited corporation, with shares divided equally between the national and city governments, was formed to manage the project. In 1989, the federal government transferred ownership of this sector of the port to the new corporation, CAPM (Corporación Antiguo Puerto Madero).

After receiving the federal land transfer, the role of CAPM was to develop the site plan, define a self-funded financial model, undertake the site improvements associated with the project, commercialize the land, and supervise the development process in accordance with the established time frames and guidelines of the master plan. Unlike similar ventures elsewhere in the world, which generally rely on substantial public financing or access to credit, CAPM by decree would receive no public resources besides the land transfer and would generate its own revenue to cover operating costs. The port redevelopment could not have happened otherwise, as the federal government was focused on fiscal recovery and job creation amidst a nationwide economic crisis.

Context and Chronology of the Megaproject

As in most Latin American cities, the displacement of activities from Buenos Aires’s traditional downtown had curtailed use of the public transit system and led to the slow decline of historical buildings, many of which had lapsed into substandard housing. The proposed redevelopment of Puerto Madero was part of the city’s broader strategy to protect heritage, promote downtown development, stimulate the local economy, and contribute to the reversal of these undesirable settlement patterns.

Development took place in four stages. During the first phase (1989–1992), CAPM sold the old docklands on the western end of the port, initiating the redevelopment process and covering initial project costs. In 1991, the city and Society of Architects signed an agreement to facilitate the Puerto Madero National Ideas Competition. In 1992, the three winning teams collaborated to create the Draft Urban Project for Puerto Madero. The redevelopment required a new subdivision geometry that would allow for construction without requiring the demolition of valuable landmark structures. Many of the historical port buildings, such as the warehouses, would be restored with new functions, thereby combining valuable historic patrimony with new development.

During the second phase (1993–1995), the winners of the Ideas Competition were awarded the master plan contract. The original proposal called for the development of 1.5 million square meters of floor area concentrated in a central location to help revive the downtown. With a 20-year horizon, the plan comprised commercial activities, cultural and recreational facilities, cafes, restaurants, amenities, professional studios, and medium-sized commercial activities (e.g. printing, packaging, and storage companies), which the 16 renovated former port warehouses could adequately accommodate. Provisions for green space, to compensate for an observed deficit in the extended city center, included a metropolitan central park, ecological reserve, and rehabilitated southern esplanade. Given the original assumption that office buildings would predominate, the number of anticipated dwelling units was to be fewer than 3,000. (Residential use experienced higher demand, however, leading to approximately 11,000 dwellings units today.)

During the third phase (1996–2000), most of the public works were built, and project expenditures peaked along with land sales. Throughout this phase, the cost per square meter of construction did not vary significantly, oscillating from around $150 to $300 per square meter up to the end of the decade. (Note: All prices are in U.S. dollars.) By this third phase, the investor profile had evolved from an initial pioneer group of small and medium firms that faced high levels of risk (1989–1993) to large firms that invested in proven products. By 2001, there was little public land left to sell, and the public corporation had enough liquid assets to complete the public works required by the project.

The fourth phase of development includes two segments, from 2001 to 2003 and from 2004 to today. Initially, the project suffered from the economic, financial, and political turmoil associated with the 2001 fiscal crisis propelled by the government’s default on its external debt payments. Throughout that period, CAPM faced high levels of governmental uncertainty, and land sales stalled. After the 2003 presidential elections, however, the country resumed international negotiations, restructured its external debt, and significantly improved economic conditions. Simultaneously, CAPM was able to resolve litigation on some parcels, which it then proceeded to sell, using the revenues to complete the public works on site.

As the land in Puerto Madero became scarce, developers looked to the surrounding downtown areas as alternative investment locations. The scale and complexity of the port redevelopment attracted investors with closer links to national and international financial markets. Many developers chose to invest downtown instead of in the suburbs. Thus the project succeeded in redirecting market trends to align with urban policy priorities—a shift that would not have happened without state intervention.

Project Achievements

Now the project is almost complete, with approximately 1.5 million square meters of floor area as planned. From start to finish, project funds were derived entirely from land sales and concessions.

By 2011, CAPM had sold approximately $257.7 million worth of property and invested $113 million in public works, with an overhead of about $92 million, including management fees and other operating expenses. Land prices escalated from $150 in the early 1990s to $1,200 per square meter today, and the project has attracted considerable private investment in addition to the state’s land transfer.

The project added four major bodies of water totaling 39 hectares and 28 hectares of green space to the city’s parks system. It also facilitated the opening of the ecological reserve and enabled renewed access to the southern esplanade, the Costanera Sur, designed at the beginning of the 20th century by Jean-Claude Nicolas Forestier, who designed Paseo de Prado in Havana, Cuba. The adjacent downtown again serves as the undisputed reference point for public office and high-level administrative, financial, and commercial activity.

Puerto Madero spurred local economic growth, which has ultimately translated into higher tax revenues. As a state initiative, it triggered more than $2.5 billion of private investment, with a present value exceeding $6 billion. Although a full accounting is not available, revenues from corporate income taxes are estimated at $158 million, and taxes paid by the public corporation are $19.86 million. The new property owners pay approximately $12.4 million per year in property taxes to the city government. Once construction is complete, property tax revenues are expected to reach $24.3 million per year.

The project also stimulated job market growth. To date, private construction in Puerto Madero involved about $450 million in labor costs—the equivalent of 900,000 months of work or 3,750 jobs per year distributed over 20 years. The project investments in public works created 313 jobs per year for 20 years plus 26,777 administrative jobs as of 2006 and 45,281 services jobs by 2010. These figures demonstrate the vital role the project has played in stimulating the local economy.

Diminished Returns

Despite the overall success of Puerto Madero, its social outcomes are considered unsatisfactory by many observers. Largely to blame was the fast sale of big land parcels during the most dynamic sales period, from 1996 to 1999. Some of these parcels were the size of an entire city block and are now occupied by towers that function in some ways like vertical gated communities. Furthermore, large, fully equipped firms were needed to perform the tremendous volume of construction, which excluded smaller and medium-sized companies. Thus, the morphology of large land parcels essentially defined the types of businesses and products being offered as well as the social profile of prospective buyers.

Moreover, the marketing strategy of private developers colored the general project discourse, diluting socially inclusive public policy objectives in favor of creating an exclusive neighborhood. Wealthy citizens and high-end entrepreneurs covet Puerto Madero’s residential and commercial spaces. CAPM has difficulty protecting the public character of even the district’s new open spaces, such as the ecological reserve, as affluent port district residents strongly discourage entertainment and sport activities that would appeal to all porteños citywide. In this regard, CAPM limited itself to articulating the interests of private entrepreneurs and current residents and ignored policies designed to benefit many inhabitants of the city. Affordable housing and other elements that would have ensured diversity in the residential demographics were not part of CAPM’s mandate. Several social programs with this objective were planned as part of the broader downtown strategy, but they did not materialize, isolating Puerto Madero as an elite development area.

The project scale of Puerto Madero, which would have been risky and unmanageable for private investors at the time, proves that the public sector can assume a leading role in developing the city. It also demonstrates, however, that socially progressive standards are difficult to maintain once a project becomes prestigious and rising land values increase the pressure from private developers. Puerto Madero’s ability to self-finance was a double-edged sword. On the one hand, it enabled a state-led development process without incurring government costs. Because the public corporation could defer the payment of dividends to shareholders, it was able to capitalize on the proceeds of land sales and reinvest in site works and public amenities. The open and accessible neighborhood, dotted with public infrastructure and open space, largely protected the public interest. Furthermore, the project stimulated economic activity and contributed to a more efficient overall development pattern citywide, fulfilling two important public policy objectives.

Outcomes would have improved if financial support from multilateral agency loans had been available, to better pace the rhythm of sales and enable long-term decisions that would enhance the public benefit of the project. Flexible bidding requirements on large plots in the second half of the 1990s increased sales but ensured that the majority of the incremental land value from the last increase in real estate prices accrued to the large investors who commited early.

In 2011, CAPM transferred the maintenance of all developed areas to the city and determined to complete the remaining public works by 2013. Today, CAPM’s income and expenditure are balanced; income is limited to rents from the piers and the parking lots. Corporate assets include several properties (offices, lots) whose proceeds constitute the company profit and whose market value is estimated at $50 million. These profits could seed new capital ventures or be transferred to shareholders when they decide to dissolve CAPM. The soundness of CAPM’s financial statements is verified, though the criticism it inspired during the development of Puerto Madero may cost it access to new ventures from the government.

The initial public investment in Puerto Madero was $120 million, including the land (originally assessed at $60 million) and a set of intangible services such as project design, expertise, and consulting. Total land sales amounted to $257.7 million with a general cost (administration, taxes) of around $92 million (excluding start-up costs, which did not involve monetary transactions), which leaves a modest rate of return. Although prices should have been promotional during the initial stage of development, sale values could have increased over time, if sales had been timed to take advantage of increased market prices. Higher rates of return would have required higher average sales value, better paced land sales, and more modest public works commitments, such as infrastructure, public space, and parks. CAPM could have saved considerably if construction of bridges and walkways had not extended beyond the project perimeter, under municipal jurisdiction.

The results of the project would have differed greatly had the land been sold unimproved or had it landed in the hands of private developers. In this regard, it is important to note that at the time of project inception the risk was generally considered high, and the scale of investment surpassed the capacity of local private investors. Similarly, international investors would have been unwilling to take on such a high level of risk without major concessions on the part of the government. Furthermore, private developers were interested in promoting large projects with access restricted almost exclusively to owners. A number of final project attributes, such as the public space contributions and holistic character of the development, were guaranteed by the control exercised by the government via the public corporation to ensure benefits for the community.

Conclusion

The original objectives of the project—to stimulate economic activity, affirm the role of the city center, contribute to the reversal of undesirable development patterns, and improve living conditions—have arguably been met. Puerto Madero created jobs, stimulated the local economy, and brought higher levels of investment and complexity downtown, contributing to its supremacy and leading to improvements in the surrounding area. It created high-quality open space, enhanced the metropolitan park system, and improved the overall development pattern in Buenos Aires.

However, the relaxation of quality controls, wide scope of the projects, and rapid pace of land sales at certain times reduced potential project revenues accruing to the public sector and reduced the initiative’s redistributive capacity. Access to credit would have strengthened CAPM’s position and allowed the careful staging of land sales and site improvements. It is encouraging that residential occupancy has greatly exceeded original projections, consolidating a trend to repopulate the city center, though the project should have included a percentage of affordable housing.

These results reveal the complexity of undertaking multiple initiatives to achieve a balanced social outcome. Puerto Madero fell short of incorporating a greater social mix, because other strategies for the downtown, including the rehabilitation of heritage buildings, were unrealized. Future urban project management initiatives should contemplate factors that would ensure the continuity of policies. Within this framework, it is important to encourage participation among the beneficiaries of specific interventions, such as affordable housing, as their involvement and commitment is the strongest guarantor of policy continuity.

Finally, Puerto Madero indicates the state’s capacity to proactively lead the urban development process. In this case, the state stepped out of a regulatory role and took charge of a significant redevelopment initiative. CAPM demonstrated a capacity to sustain a complex urban regeneration project over a long period of time and stay afloat through a turbulent political climate and severe economic crisis. The creation of the public corporation represents a creative innovation in urban management, as it offers an example of how to achieve project self-financing and interjurisdictional cooperation in urban governance. In this regard, the Puerto Madero experience serves as a convincing model for interjurisdictional urban management and reaffirms the positive role that the state can play in city planning initiatives.

About the Authors

Alfredo Garay was secretary of planning in Buenos Aires when the Puerto Madero megaproject began, and he still serves on the board of CAPM. An architect and chair professor at the University of Buenos Aires, he has received numerous national and international awards for urban management and the assembly of large interventions.

Laura Wainer is an architect and urban planner in Buenos Aires. In 2012, she received a Fulbright Scholarship, the Delta Kappa Gamma International Fellowship, and the President’s Scholarship from the New School in New York. Contact: wainer.laura@gmail.com

Hayley Henderson has worked as an urban planner in Buenos Aires and Brisbane, Australia. She is now a PhD candidate in urban planning at The University of Melbourne, Australia. Contact: hayleyhen@gmail.com

Demian Rotbart is an architect, urban planner, and assistant professor of urban planning at the University of Buenos Aires. Contact: demian.rotbart@gmail.com

Muchas áreas suburbanas de los Estados Unidos están mostrando signos de deterioro, con propiedades abandonadas, centros comerciales vacantes y espacios subutilizados. Estos paisajes han venido a caracterizar la expansión descontrolada: lugares construidos para el automóvil y a los que sólo se puede acceder por automóvil. Pero estos suburbios también tienen enormes oportunidades de reinvención creativa. Varias comunidades a lo largo del país están rediseñando la escala de sus suburbios para convertirlos en lugares animados y accesibles a peatones, construidos para la gente.

Los barrios suburbanos reorientados para peatones pueden prosperar y diversificarse para brindar un mayor respaldo a las economías locales, elevar los indicadores de calidad de vida, y mejorar las condiciones medioambientales locales y regionales. Incluso los suburbios deteriorados, plagados de estructuras en desuso y otras zonas muertas, tienen el potencial para generar nueva infraestructura de vivienda, acceso al transporte público, espacios abiertos y tiendas.

La Universidad de Utah estima que hay 1,1 millones de hectáreas de lotes de estacionamiento y otras áreas grises que están listas para ser revitalizadas, y medio millón de hectáreas están disponibles en áreas comerciales subutilizadas, como centros comerciales abiertos y tiendas vacantes (Dunham Jones y Williamson 2009). La transformación de estos paisajes va a ser una prioridad de planificación y desarrollo en los Estados Unidos en el siglo XXI.

Muchas ciudades están revitalizándose constantemente y capitalizando las recientes tendencias demográficas que respaldan dichos esfuerzos, pero las regiones económicamente robustas también necesitan comunidades suburbanas florecientes. Encuestas recientes realizadas por la Asociación Nacional de Corredores de Bienes Raíces y la Asociación Americana de Planificación han revelado que una mayoría de compradores potenciales prefiere vivir en barrios peatonales, con diversidad de tipos de vivienda y una mezcla de opciones residenciales, empresariales y comerciales. A medida que los “baby boomers” envejecen y la mayor parte de la generación del milenio ingresa en la adultez, una creciente cantidad de estadounidenses está dejando sus automóviles para vivir en entornos más céntricos y peatonales. En 2012, aproximadamente la mitad de la población prefería casas más pequeñas en barrios bien conectados con lugares para vivir, trabajar, hacer las compras y jugar (Asociación Nacional de Corredores de Bienes Raíces, 2011, Asociación Americana de Planificación, 2014).

A pesar de la creciente evidencia en favor de la revitalización urbana, muchos líderes locales no saben a ciencia cierta cómo empezar. Este artículo explora 10 maneras en que las comunidades de todo el país han reducido la escala de partes significativas de sus suburbios de expansión descontrolada para convertirlos en centros sociales florecientes.

1. Compartir una visión y elaborar un plan

Muchas comunidades comienzan por imaginar cómo quieren crecer y después elaboran un plan para concretar esa visión. ¿Los residentes quieren más viviendas, un centro de entretenimiento peatonal, un nuevo distrito de artes o una zona de agricultura urbana? ¿Es más importante aumentar la base gravable, reducir las víctimas mortales de peatones y de ciclistas, o aumentar el acceso a comida fresca? Las metas específicas ayudan a dirigir los esfuerzos de revitalización.

Los planes regionales y barriales hacen participar a los miembros de la comunidad en un diálogo sobre cómo aplicar las inversiones de infraestructura y aprovechar las oportunidades de revitalización a medida que aparecen. Los gobiernos locales pueden comenzar con un sitio pequeño —como un lote vacante o un edificio municipal— y, después de que dicho proyecto haya sido exitoso, continuar con más obras, generando el impulso necesario para rediseñar un barrio o corredor urbano entero, o incluso un sitio contaminado una vez que se haya limpiado. Un propósito compartido acerca de un lugar puede ser un incentivo poderoso para guiar el cambio en el futuro.

Considérese Midvale Slag y Sharon Steel, dos sitios contaminados adyacentes ubicados aproximadamente a 16 kilómetros al sur de Salt Lake City en Midvale, Utah. Ambos fueron descontaminados aproximadamente al mismo tiempo, pero sólo uno está prosperando.

En 2000, el Concejo Municipal de Midvale adoptó la “Evaluación de Reutilización y Plan de Ordenamiento de Bingham Junction” para el sitio de Midvale Slag, de 180 hectáreas de superficie. Los funcionarios municipales trabajaron con residentes, autoridades de la Agencia de Protección Ambiental (EPA) y otras partes interesadas para crear una estrategia de revitalización del sitio y convertirlo en un área de uso mixto comercial, residencial y recreativa. Ahora próspero, Bingham Junction creó aproximadamente 600 puestos de trabajo, 1,5 millones de dólares en ingresos anuales por el impuesto sobre la propiedad, y un aumento de 131 millones de dólares en el valor de las propiedades (EPA 2011). Las familias se han mudado a nuevos condominios, y se piensa construir 2.500 unidades residenciales más. También se han construido edificios de oficinas, un supermercado y otros almacenes, y la comunidad piensa desarro-llar hasta 200 mil metros cuadrados de oficinas comerciales y tiendas.

En contraste, el sitio de Sharon Steel, de 100 hectáreas, que no tenía un plan de revitalización ni una visión para el futuro, permanece vacante. Sin embargo, gracias al éxito de Bingham Junction, los funcionarios municipales han comenzado el proceso de planificación y construcción de visión en ese sitio.

2. Identificar activos

A muchos gobiernos locales les cuesta determinar dónde concentrar sus esfuerzos iniciales de planificación y construcción de visión. Los siguientes tipos de preguntas pueden ayudar a identificar qué tipos de activos aprovechar.

1. ¿Hay transporte público disponible? En caso afirmativo, ¿hay áreas subutilizadas cerca o inmediatamente adyacentes a paraderos de transporte que se podrían revitalizar para mejorar el acceso?

2. ¿En qué se invertirá el dinero de infraestructura existente? Por ejemplo, ¿en caminos, agua, alcantarillado, escuelas, estructuras cívicas, parques?

3. ¿Hay lotes de estacionamiento, edificios o centros comerciales vacantes o subutilizados cerca de estas inversiones de infraestructura?

4. ¿Cuáles de estas áreas tienen planes de revitalización o respaldo barrial para nuevos emprendimientos?

5. ¿Cuáles de estas áreas están cerca o adyacentes a otros activos públicos, como escuelas, biblio-tecas, parques o espacios abiertos?

6. ¿Algunos de estos sitios se pueden alinear con áreas de empleo existentes o emergentes?

7. ¿Algunas de estas propiedades están disponibles para ser revitalizadas? Es decir, ¿hay algún dueño dispuesto a colaborar con los objetivos y planes de revitalización de la comunidad?

Esta evaluación de propuestas no es un proceso lineal, paso por paso. A veces un sitio puede dejar de estar accesible de improviso, o se puede recibir un subsidio federal para convertir una carretera en una ruta principal. En otras situaciones, un dueño quizás no tenga voluntad para cooperar, o un sitio puede considerarse no apto. De todas maneras, una evaluación de las condiciones existentes puede ayudar a identificar sitios potenciales o barrios prioritarios.

3. Aprovechar las inversiones en infraestructura

Para atraer inversiones privadas y nuevos emprendimientos, los gobiernos locales pueden realizar inversiones públicas significativas, ya sea modernizando la infraestructura existente o invirtiendo en infraestructura nueva. Muchas ciudades y pueblos aprovechan la oportunidad para realizar inversiones de infraestructura en barrios que quieren revitalizar. Las investigaciones han demostrado que al aprovechar las inversiones públicas, las comunidades pueden aumentar el valor del suelo de un 70 a un 300 por ciento, estimulando al mismo tiempo las inversiones privadas, el capital social, el turismo y la actividad comercial un promedio del 30 por ciento (Litman 2010). También pueden alcanzar objetivos de planeación y revitalización reformando espacios públicos comunitarios para aumentar su valor compartido.

Norman, Oklahoma, ubicada aproximadamente 40 kilómetros al sur de Oklahoma City, es una obra interesante en curso. El pueblo tenía 27 millones de dólares para mejorar el flujo de tráfico y aumentar la seguridad en un segmento de siete cuadras de una calle que cruzaba la típica línea de tiendas de un distrito, con grandes lotes de estacionamiento a ambos lados de la calle. El pueblo se unió para ver cómo utilizar este dinero para realizar mejoras de mayor alcance en el paisaje vial, junto con las mejoras de seguridad necesarias. Empresarios, funcionarios universitarios y líderes locales se unieron para participar en planes estratégicos de ecología urbana y ver cómo se podría crear un área comercial peatonal.

Las municipalidades también pueden aprovechar las inversiones de capital para alcanzar otros objetivos comunitarios. Con recursos cada vez más escasos, los gobiernos locales no pueden ya darse el lujo de invertir en infraestructura con un objetivo único. Por ejemplo, la ciudad de Lenexa, Kansas (un suburbio de Kansas City), se propuso ser una comunidad más sostenible y vivible, y usó proyectos de infraestructura verde para alcanzar esta meta. Usando fondos de la Ley de Recuperación y Reinversión Americana, los funcionarios municipales implementaron una serie de mejoras en las bocas del alcantarillado a nivel vial que satisficieron objetivos claves de planeación y revitalización urbana, como la creación de espacios abiertos y el fomento de actividad peatonal, al mismo tiempo que resolvían los problemas del desagüe de la aguas pluviales.

4. Alinear códigos y ordenanzas

Algunos de los mayores impedimentos para el rediseño de los entornos suburbanos son los códigos y ordenanzas anticuadas e incoherentes. Estas regulaciones para el desarrollo del suelo —desde ordenanzas de zonificación a normas viales, requisitos de estacionamiento, cobertura de predios y límites de altura— son con frecuencia responsables de los patrones existentes de transporte y uso del suelo, y conforman la estructura legal por defecto de todos los emprendimientos nuevos. La consecuencia es que la construcción de un barrio peatonal de uso mixto es frecuentemente ilegal, y el emprendedor tiene que solicitar exenciones o permisos especiales, que pueden generar incertidumbre y demoras en el proceso de desarrollo o desalentar por completo los proyectos de revitalización.

Los estudios han demostrado que el respaldo gubernamental al desarrollo en las áreas de interés es el mejor predictor de inversiones privadas (Hook et al. 2013). Una de las maneras más fáciles de apoyar un crecimiento nuevo es cambiar los códigos y ordenanzas para legalizar los emprendimientos con acceso peatonal. Los nuevos códigos se pueden incorporar a una zona de actividad superpuesta o un plan barrial, para permitir el tipo de construcción necesario para transformar un área.

Hay una serie de recursos disponibles para ayudar a los gobiernos locales a determinar dónde y cómo cambiar sus códigos, como SmartCode (www.smartcodecentral.org), códigos basados en formularios (http://formbasedcodes.org), los códigos inteligentes de la Asociación Americana de Planificación: Regulación de desarrollo modelo de suelo (https://www.planning.org/research/smartgrowth), o la serie Essential Fixes (Correcciones esenciales) de la EPA (www.epa.gov/dced/essential_fixes.htm).

Por ejemplo, Columbia Pike en Arlington, Virginia, un corredor urbano de 5 kilómetros de longitud al que se llega cruzando el río Potomac desde el centro de Washington, DC, fue revitali-zado a escala peatonal después de que el condado modificó los códigos y ordenanzas de desarrollo subyacentes. En Columbia Pike, ubicada en un condado urbano que creció de forma explosiva en décadas recientes, el desarrollo y la inversión habían sido, por el contrario, mínimas en los últimos 30 años. A finales de la década de 1990, los líderes del condado crearon un código basado en formularios para fomentar una revitalización del corredor orientada al transporte público y el tránsito peatonal. El código es un código optativo (también conocido como código paralelo); la zonificación subyacente permanece activa, pero su uso es alentado por procedimientos de revisión y aprobación rápida. Desde la adopción del código en 2003, se han construido en la zona de Columbia Pike 1.000 unidades de vivienda nuevas y 22.297 metros cuadrados de edificación comercial, y se han aprobado 600 unidades de vivienda nuevas y 2016 metros cuadrados de edificación comercial.

5. Diseñar bien las calles

Para cualquier esfuerzo de revitalización, la red vial de la comunidad es fundamental. Los suburbios típicos tienen carriles anchos y de alta velocidad, diseñados para que los automóviles se puedan desplazar eficientemente por la zona. Pero el interés principal de todo esfuerzo de rediseño urbano debería ser el de posibilitar el desplazamiento a la gente y no los automóviles por un área. Este objetivo se puede lograr construyendo aceras anchas y atractivas, instalando carriles y estacionamiento para bicicletas, creando zonas de aislamiento entre la gente y el tránsito vehicular; desarrollando lugares atractivos para caminar; y diseñando cruces viales seguros. Las calles bien concebidas también pueden desencadenar inversiones y el proceso de revitalización. Sin embargo, en muchas comunidades suburbanas, que tienden a ser menos competitivas, el sector público quizás tenga que catalizar el crecimiento con inversiones iniciales de respaldo de infraestructura y equipamiento para atraer fondos privados.

Por ejemplo, Lancaster, California, una ciudad de tamaño mediano a 100 kilómetros al norte de Los Ángeles, transformó una arteria de cinco carriles en una calle comercial invirtiendo en una serie de mejoras viales. Estrecharon y redujeron la cantidad de carriles de tránsito, y agregaron estacionamiento en la calle y vegetación vial, lo cual redujo el tráfico de 60 kilómetros por hora a 25 kilómetros por hora. La inversión de 11,5 millones de dólares de la ciudad atrajo más de 300 millones de dólares en inversiones privadas.

6. Diseñar bien el estacionamiento

El estacionamiento es un problema para cualquier emprendimiento, pero es particularmente problemático en áreas suburbanas donde la comunidad está tratando de eliminar su dependencia del automóvil. La creencia popular es que el estacionamiento es esencial para la supervivencia de las tiendas; por lo tanto, muchas áreas suburbanas tienen un exceso de oferta de estacionamiento, debido a los distintos requisitos de código, diseño o financiamiento. Pero todo esfuerzo exitoso para rediseñar un suburbio requiere que los planifica-dores sopesen las necesidades de estacionamiento actuales con una visión creativa para un futuro menos dependiente del automóvil.

Las comunidades pueden evaluar cuánto estacionamiento es necesario y explorar modos alternativos de satisfacerlo colocando lugares de estacionamiento en la calle, permitiendo el estacionamiento compartido, o desvinculando los espacios de estacionamiento de las unidades de vivienda (EPA 2006). Para promover un entorno vial atrac-tivo para los peatones, es fundamental eliminar o reducir el estacionamiento de superficie, o colocarlo detrás de las áreas de tiendas. Los proyectos de revitalización más grandes quizás requieran un garaje de estacionamiento, pero debería estar ubicado en la parte trasera del sitio y no inmediatamente adyacente a otras oportunidades de tránsito. Es cada vez más común “envolver” el garaje de estacionamiento con unidades de viviendas más pequeñas u oficinas, para poder proporcionar estacionamiento sin interrumpir el paisaje vial.

A medida que el barrio reduce su dependencia del automóvil, puede reconvertir los garajes de estacionamiento incorporando jardines comunitarios en los pisos superiores o creando espacio de alquiler económico para empresas nacientes en los pisos inferiores. Una comunidad de Albany, Nueva York, transformó un viejo garaje de estacionamiento y concesionaria de automóviles en condominios de lujo.

Al planificar para usos futuros, un barrio puede mantener los espacios de estacionamiento que necesita ahora y permitir que el área evolucione, sin perder las inversiones iniciales efectuadas durante el proceso de revitalización. Los gobiernos locales también pueden modificar los códigos de zonificación y edificación para demandar que los constructores de garajes cumplan con requisitos mínimos de adaptabilidad (Jaffe 2013).

7. Agregar más zonas verdes

Los paisajes suburbanos se han descrito como “hostiles” o “insalubres” debido a sus amplias zonas subutilizadas, dominadas por superficies pavimentadas. Pero muchas comunidades están recuperando la naturaleza en estos entornos edificados, y transformando las calles y los pasajes que se encuentran entre un edificio y otro en zonas peatonales atractivas y florecientes.

Los árboles, las plantas, los espacios verdes abiertos y caminos recreativos ofrecen un descanso a la gente, proporcionan áreas de reunión social, mejoran las condiciones medioambientales y crean paisajes viales más habitables (Benfield 2014). Los sitios suburbanos pueden facilitar la integración de espacios verdes en nuevos proyectos de desarrollo porque frecuentemente tienen más acceso al suelo y flexibilidad que las áreas urbanas. Como inversión pública, el espacio verde también puede atraer iniciativas de desarrollo privado.

Los espacios verdes se pueden incorporar a tres niveles: en una región, en un barrio o en cada sitio individual. A escala de sitio, las municipalidades están comenzando a usar infraestructura verde para controlar las aguas lluvias, absorbiéndola en el suelo o captándola para usarla más adelante. Estas estrategias crean lugares más bellos, aumentan la seguridad peatonal, reducen la velocidad del tráfico, controlan los caudales de agua y generan apoyo popular para crear un sistema de gestión de aguas pluviales más efectivo. (Al igual que los baches, una alcantarilla visiblemente tapada al nivel de la calle probablemente genere más llamadas al municipio que una fuga en una tubería subterránea invisible). Las soluciones a nivel de sitio también pueden crear el impulso para una transformación suburbana de mayor escala, creando al mismo tiempo espacios públicos bulliciosos en antiguos lotes de estacionamiento, pasajes, edificios, áreas apaisajadas, techos o calles. Imagínense, por ejemplo, un mar de vegetación en cascada descendiendo del techo de un garaje de estacionamiento, o una plaza peatonal con macetas, árboles, mesas y sillas en una sección de un antiguo lote de estacionamiento.

A nivel regional y de barrio, los espacios verdes pueden conectar áreas naturales con tierras de cultivo y al mismo tiempo ofrecer funciones ecológicas críticas. Además, estas conexiones pueden dar soporte a caminos y senderos de uso múltiple, corredores de hábitats y otros “dedos verdes” integrados en la región. Los enfoques regionales se concentran en el movimiento de vida silvestre, gente y recursos naturales, como el agua. Las estrategias barriales se enfocan en conexiones con redes regionales más grandes, creando lugares interconectados de reunión pública, espacios abiertos, caminos coordinados de uso múltiple, y una red de infraestructura para bicicletas.

La revitalización del aeropuerto Stapleton en las afueras de Denver, Colorado, incorporó espacios verdes a nivel regional y barrial. Aproximadamente un tercio de sus 2.000 hectáreas se ha destinado a nuevos parques y espacios abiertos para las 12.000 unidades residenciales del proyecto. Cada casa se encuentra a 10 minutos de caminata de un espacio abierto. Los componentes centrales son el Central Park de 32 hectáreas y el corredor Westerly Creek de 34 hectáreas. Se han plantado más de 27.000 árboles, y los 6 millones de toneladas de hormigón que anteriormente formaban parte de las pistas de aterrizaje del aeropuerto se han incorporado ahora a los nuevos parques que se crearon. Este proyecto de revitalización no sólo convirtió el aeropuerto en un próspero entorno peatonal, sino que también genera anualmente 22 millones de dólares en impuestos sobre la propiedad y 13 millones de dólares en ingresos por impuesto a las ventas (Swetlik 2013).

8. Cambiar el uso del suelo

Muchas áreas suburbanas están repletas de grandes almacenes abandonados o subutilizados, y centros comerciales anticuados. Al volver a utilizar estos edificios como bibliotecas, escuelas, viviendas y hasta iglesias, las comunidades pueden reactivar una zona muerta y crear demanda en ese lugar. También pueden prevenir o retrasar el patrón de expansión descontrolada, reduciendo la necesidad de construir nuevas grandes tiendas departamentales en parcelas sin desarrollar. Sin una estrategia de revitalización más amplia, sin embargo, el reúso de grandes tiendas departamentales no modificará el paisaje físico para permitir una actividad peatonal significativa.

Los emprendedores urbanos frecuentemente tienen que consolidar parcelas y negociar con múltiples dueños, especialmente en corredores con múltiples centros comerciales y tiendas minoristas de uso único. En consecuencia, muchos emprendedores prefieren los viejos centros comerciales, que en general tienen una superficie significativa, un solo dueño, caminos existentes, servicio de agua y alcantarillado y viviendas residenciales adyacentes. La megaestructura existente quizás se tenga que demoler y reemplazar por edificios de densidad moderada, una cuadrícula vial tradicional y una mezcla de uso comercial y residencial. Por ejemplo, el proyecto de revitalización de las 40 hectáreas del Belmar Mall en Lakewood, Colorado, reconectó la cuadrícula vial. Estas calles atractivas para el tránsito peatonal ahora tienen 1.300 viviendas nuevas, cien mil metros cuadrados de espacio comercial y 63.000 metros cuadrados de espacios de oficina. Este método ha creado un centro en muchas comunidades suburbanas, o una revitalización similar de gran escala en dichos sitios.

El proceso de transformación de un paisaje suburbano en un barrio floreciente y peatonal toma tiempo y puede requerir inversiones en infraestructura pública. Reconociendo esto, algunas municipalidades piensan realizar un proceso de revitalización por etapas en varias décadas, pero proporcionando fondos en forma inmediata para infraestructura que será aprovechada por las inversiones futuras. Un componente crítico de un desarrollo por etapas exitoso es un proceso de planificación y zonificación compatible por parte del gobierno local. Se pueden diseñar acuerdos de largo plazo para aumentar la densidad o realizar actividades de revitalización en gran escala en un período de tiempo en particular, permitiendo que se vaya construyendo la oferta y demanda en el mercado.

Un ejemplo de un desarrollo por etapas exitoso es Potomac Yards en Alexandria, Virginia. Este antiguo sitio industrial fue descontaminado en 1997 y desarrollado de acuerdo a la zonificación en vigor en ese momento, creando un centro comercial abierto tradicional. Los inquilinos firmaron contratos de alquiler por 15 años, un plazo normal en ese momento y lugar. En los años siguientes, los funcionarios municipales obtuvieron financiamiento para construir una nueva estación del metro en la parte trasera del centro comercial, y se construyeron también varios edificios residenciales de uso mixto y alta densidad. Como resultado, el valor del suelo en Potomac Yards aumentó significativamente. En 2010, el concejo municipal aprobó un plan de revitalización, que comenzará en 2017 y se sincronizará con la apertura de la parada del metro. El centro comercial abierto será demolido para dar lugar a un nuevo barrio peatonal de uso mixto con 650.000 metros cuadrados destinados a oficina, comercio y residencias.

9. Proporcionar un liderazgo catalizador

El rediseño de barrios suburbanos para uso peatonal requiere la coordinación y cooperación entre departamentos municipales que normalmente operan en forma independiente. Los departamentos de transporte administran los sistemas viales, los departamentos de vivienda se encargan de viviendas de interés social, y los departamentos de obras públicas construyen sistemas de alcantarillado. Pero no hay un único departamento que pueda implementar la compleja gama de estrategias y cambios físicos necesarios para transformar una subdivisión residencial de uso único o distrito comercial en un barrio peatonal de uso mixto.

El liderazgo catalizador se basa por partes iguales en mediación, facilitación y liderazgo. Se basa en respetar la metodología tradicional de cada departamento, reconociendo al mismo tiempo que no hay un departamento en particular que tenga todas las respuestas o datos para resolver ciertos problemas. El liderazgo catalizador puede generar la confianza y el respeto necesarios para promover enfoques más colaborativos e innovadores para superar los desafíos presentados por la construcción de espacios suburbanos. Es esencial para orquestar estos esfuerzos, mediar entre partes con distintas agendas, y alcanzar las metas deseadas a tiempo y dentro del presupuesto.

La revitalización exitosa del centro de Silver Spring, Maryland, se benefició de este tipo de liderazgo. El área había sido un centro de comercio minorista dinámico en los años de posguerra. Pero como muchos centros suburbanos, perdió gran parte de su vitalidad cuando aparecieron los centros comerciales cerrados en la década de 1970, y los intentos posteriores de recuperar la base comercial fracasaron. En 1996, el condado decidió revitalizar el área creando una comunidad orientada a los peatones, de uso mixto y con acceso a transporte público. El administrador del condado sabía que la lentitud del proceso de otorgamiento de permisos podría afectar el proyecto, así que creó un programa de reducción burocrática, recogiendo la opinión del personal local responsable de hacer cumplir los códigos de edificación y del sitio (construcción, electricidad, incendio, mecánica, accesibilidad, zonificación, carteles, gestión de sedimentos y aguas pluviales, revisión del plan de subdivisión, y códigos y normas de inspección). Los participantes, reunidos en mesas redondas, identificaron y resolvieron problemas interdepartamentales para los proyectos propuestos en la zona de revitalización. Al reunirse en un mismo lugar, los representantes de todos los departamentos pudieron superar las barreras de diseño, zonificación y códigos de manera más eficiente. Como resultado, Silver Spring ha transformado su paisaje suburbano en una comunidad floreciente, con más de 70.000 metros cuadrados de superficie comercial y de esparcimiento, 46.000 metros cuadrados de espacio de oficinas y casi 2.000 residencias.

10. Anticipar lo que viene

El proceso de rediseño de comunidades suburbanas puede ser largo y difícil, pero hay una serie de puntos de partida posibles, desde la creación de una visión y planes, hasta la realización de inversiones de infraestructura y la construcción del primer proyecto. Al comenzar este proceso, los líderes municipales deberían considerar varios temas:

• Determinar cómo medir el éxito. Tener un objetivo claro y mensurable para la revitalización de un corredor o de un centro comercial abierto puede ser crítico para asegurar que el proyecto siga su curso. ¿El objetivo es aumentar las ventas minoristas, la cantidad de pasajeros que usan el transporte público o la cantidad de viviendas de interés social? En el curso de un proyecto, las comisiones municipales y las juntas de planificación, zonificación y transporte tendrán que tomar decisiones aparentemente menores —como, por ejemplo, aumentar o disminuir la cantidad de plazas de estacionamiento— que pueden tener efectos potencialmente con-siderables. Es más probable que las municipalidades alcancen sus objetivos de largo plazo si articulan y definen claramente las medidas del éxito desde el comienzo.
• Gestionar los lugares revitalizados para todos los grupos de ingreso y edad. Muchas ciudades y pueblos están aprovechando la expansión de las líneas de transporte público para transformar sus paisajes suburbanos, lo cual atraerá a más minorías, residentes de bajos ingresos y jóvenes que quieren vivir en barrios peatonales. Las municipalidades tienen que planificar de acuerdo a ello, y adaptarse a estas nuevas demografías proporcionando viviendas de interés social, oportunidades de empleo y opciones de comercio minorista.
• Respetar y celebrar las originalidades locales y regionales. Esencialmente, los barrios atractivos tienen un gran sentido de lugar, con paisajes viales, estilos arquitectónicos o arte pública singulares. A medida que las comunidades transforman sus paisajes suburbanos, los líderes pueden permitir que los barrios crezcan orgánica y auténticamente, y evitar que centros comerciales genéricos se reemplacen por centros municipales genéricos que a largo plazo no se desempeñen mucho mejor.

La evolución de los paisajes suburbanos en los Estados Unidos representa oportunidades enormes para repensar de forma creativa los entornos edificados y naturales del país. El rediseño de estos lugares para peatones puede ayudar a restaurar la actividad en las calles y crear lugares vitales y prósperos para vivir y trabajar.

Sobre la autora

Lynn Richards, próxima presidente y directora ejecutiva del Congreso para el Nuevo Urbanismo, fue fellow Lincoln/Loeb de 2013 en la Escuela de Posgrado de Diseño de la Universidad de Harvard y el Lincoln Institute of Land Policy. Previamente, a lo largo de 13 años, ocupó varios puestos de liderazgo en la Agencia de Protección Ambiental de los EE.UU. (EPA), entre ellos, directora en ejercicio y directora de políticas de la Oficina de Comunidades Sostenibles.

Recursos

American Planning Association (APA). 2014. Investing in Place: Two Generations’ View on the Future of Communities: Millennials, Boomers, and New Directions for Planning and Economic Development. APA, May. https://www.planning.org/policy/polls/investing/pdf/pollinvesting report.pdf.

Benfield, Kaid. 2014. People Habitat: 25 Ways to Think about Greener, Healthier Cities. Island Press.

Dunham Jones, Ellen, and June Williamson. 2009. Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs. Wiley and Sons.

Environmental Protection Agency (EPA). 2011. Cleanup and Mixed-Use Revitalization on the Wasatch Front: The Midvale Slag Superfund Site and Midvale City, Utah. Mayo.

EPA. 2006. Community Spaces, Parking Places: Finding the Balance through Smart Growth Solutions. EPA 231-K-06-001.

Hook, Walter, Stephanie Lotshaw, and Annie Weinstock. 2013. More Development for Your Transit Dollar: An Analysis of 21 North American Transit Corridors. Institute for Transportation and Development Policy.

Jaffe, Eric. 2013. “We Need to Design Parking Garages with a Car-less Future in Mind.” Atlantic Cities, 14 noviembre.

Litman, Todd. 2010. Evaluating Non-Motorized Transport Benefits and Costs. Victoria Transport Policy Institute. www.vtpi.org/nmt-tdm.pdf.

Lukez, Paul. 2007. Suburban Transformations. Princeton Architectural Press.

National Association of Realtors (NAR). 2011. The 2011 Community Preference Survey: What Americans Are Looking for When Deciding Where to Live. NAR, March. http://www.realtor.org/sites/default/files/smart-growth-comm-survey-results-2011.pdf.

Swetlik, Deana. 2012. “The Many Uses Blooming at Denver’s Old Airport: Stapleton.” Urban Land, 11 octubre, 2012.

We are inaugurating our fourteenth volume year of Land Lines with a new look and feel—more color, more articles, more news about our faculty, and more announcements about our courses, publications and special projects.

In the past five years our educational programs have expanded to reach policy makers and practitioners in federal, state and local government throughout the United States and in many countries of Latin America, Europe, Africa and Asia. Our faculty has developed a broad range of introductory and advanced professional development courses that explore both the theory and practice of land and tax policy.

The Institute’s Department of Valuation and Taxation, chaired by Joan Youngman, has three major goals: improving public and scholarly debate on the taxation of land value; addressing the economic impact, feasibility, political acceptability, and appropriate use of value-based taxes; and contributing to a better understanding of the valuation process for tax purposes. The local property tax, as the primary value-based tax in the United States, is a major focus of the Institute’s work, but we analyze a variety of revenue instruments, particularly with regard to their treatment of land value increments attributable to public investment.

The Department of Planning and Development, cochaired by Rosalind Greenstein and Armando Carbonell, links interests in the theory and practice of planning with an understanding of how land markets operate. Our concerns focus on urban and regional planning and design, land conservation, urban redevelopment, and the behavior of land markets. We are particularly interested in the integration of urban and environmental systems; the planning process and its outcomes; the interplay of public and private roles in decisions involving land policy and land use; the effect of land markets and the institutions that support them on the city and its residents; and the role of land and real estate in the larger economy and in poverty alleviation.

Building on our experiences in Latin America since 1993, Martim Smolka directs the Institute’s Program on Latin America and the Caribbean in developing activities oriented toward both scholars and practitioners, including legislative and executive policy officials and upper-level technical staff. Programs focus on five priority topics: value capture policies and implementation of instruments to mobilize land value increments; property taxation systems that can meet the needs of rapid urbanization; regulatory environments supporting large-scale urban intervention; security of tenure, regularization and urban upgrading programs; and urban land market forces, including spatial and social segregation, speculation, vacant land and related issues.

Each issue of Land Lines will continue to feature articles by faculty who share the ideas discussed and lessons learned in Institute-sponsored courses. In addition, we will announce upcoming courses, lectures and other programs that are open to a general audience, and we will keep you informed about new publications, web-based programs and other resources that address our work in land and tax policy.

For more than a century, California’s Great Central Valley has been recognized as one of the world’s foremost agricultural regions. A giant basin 450 miles long and averaging 50 miles wide, the Valley encompasses some 19,000 square miles. With only one-half of one percent of the nation’s farmland, the Valley accounts for 8 percent of the nation’s farm output-including 15 percent of America’s vegetable production and 38 percent of fruit production.

Today, large parts of the Valley are making a transition to an urban economy. Led by such emerging metropolitan areas as Sacramento, Fresno and Bakersfield, the Central Valley already has more than 5 million residents. State demographers predict growth to reach almost 9 million people by 2020 and more than 11 million by 2040.

Given this scale of urban growth, what are the key issues facing the Valley? With the assistance of the Lincoln Institute, the Great Valley Center-a non-governmental organization supporting the economic, social and environmental well-being of California’s Central Valley-has undertaken an effort to try to frame this basic question. Which issues are purely local, and which ones require a more regional approach? What are the constraints the Valley faces in the decades ahead? And, finally, what are the choices? How might the Valley approach the question of accommodating urban growth while still retaining an agricultural base, a vibrant economy, a good quality of life and an enhanced natural environment?

Perhaps the biggest question is simply whether the Central Valley can accommodate such a vast quantity of urban growth and still maintain its distinctive identity. For decades, the Valley’s regional environment consisted mostly of three elements intertwined on the landscape-vestiges of nature, a panoply of crops and compact agricultural towns. The development of agriculture created a rural landscape, but one in which nature was often sacrificed for agricultural production. A distinctive urban form evolved that was far different from the rest of California. The Valley’s older towns, often sited on railroad lines, are typically compact but not dense, with wide, shady streets stretching out along the flat expanse from an old commercial downtown.

Regional and Sub-Regional Growth Dynamics

In determining urban development options for the Central Valley, it is important to understand the context of growth dynamics that affect the entire region as well as important sub-regions. Although the geographical size of the Central Valley is very large-far larger than many states, for example-in many ways it should be viewed as one region with a common set of characteristics and problems. These include:

Air quality: The Central Valley consists of one air basin, and so pollutants emitted in one part of the Valley can have an impact hundreds of miles away.

Water supply and distribution: Although many parts of the Central Valley depend heavily on groundwater, almost every community in the region is at least partly dependent on one water source: The drainage that flows into the Sacramento and San Joaquin Rivers and then through the Sacramento Delta. This water source is also used in many different ways by both state and federal water projects. Transportation links: The Central Valley is connected internally and to other regions by a series of transportation links. Most obvious are the major freeway corridors, including Highway 99, Interstate 5, and Interstate 80, along with rail lines, which generally follow the Highway 99 corridor.

Land supply and cost: In virtually all parts of the Central Valley, land is cheaper and in more abundant supply than it is in coastal areas. This is one of the main reasons why population growth has shifted from the coast to the Central Valley.

At the same time, the Valley can be viewed as a group of five sub-regions, each with its own growth dynamic. These include:

North Valley: Seven counties in the northern portion of the Sacramento Valley remain rural and experience relatively little urban growth pressure compared to the rest of the Valley.

Sacramento Metro: Six counties around Sacramento have the highest rates of educational attainment and the highest wage scales anywhere in the Valley, largely because of the state capital, the University of California at Davis, and proximity to the Bay Area. This has become a popular location for high-tech employers.

Stockton-Modesto-Merced: Traditionally a major ranching and agricultural area, these centrally located counties are now experiencing tremendous urban growth pressure because of Bay Area commuting, though they are not adding jobs as rapidly as Sacramento Metro.

Greater Fresno: Four counties near Fresno remain the agricultural heartland of the Central Valley. Though population growth rates are high due to immigration and high birth rates, especially in the metropolitan Fresno area, the economy is only beginning to diversify and remains heavily focused on agriculture and related industries. As with other parts of the Valley, much of Greater Fresno’s population growth has come from immigration and high birth rates.

Bakersfield-Kern County: Somewhat separate geographically from the rest of the San Joaquin Valley, this area remains a center of both agriculture and extractive industries, especially oil. This region is experiencing rapid population growth and is the only part of the Valley that appears to be directly influenced by spillover growth from Greater Los Angeles.

Underlying Issues

With so much urban growth on the horizon, the Central Valley’s twenty-first-century landscape will be shaped by the interplay among several different issues:

Agriculture: Agriculture is likely to consume less land and less water in the future than it has used in the past, but it is still likely to be the sector that most determines the Valley’s urban growth patterns. The critical issues are: What kind of agricultural base will the Valley have in the next century, and how much land and water will that agricultural base require? Recent trends have moved the Valley toward ever-higher-value crops, and competition with foreign markets is expected to be fierce.

Socioeconomic issues: The Valley has traditionally lagged behind the rest of California in social and economic indicators. Unemployment and teenage pregnancy are high, while household income and educational attainment is low. Like the rest of California, the Valley is rapidly evolving a unique mix of racial diversity. Although the Valley will soon get a boost from the creation of a new University of California campus in Merced County, the region’s overall economic competitiveness may not be able to match its urban population growth.

Natural resources: In the rush to create one of the world’s great agricultural regions, the Central Valley’s leaders often overlooked the wonderland of natural resources that lay at their feet. For example, the Valley’s vast system of wetlands, once one of the largest and most important in the world, has almost completely disappeared, much to the detriment of the migratory bird population. In the future, there will be increasing pressure to restore and enhance these natural resources even as the Valley continues to urbanize. The entire San Francisco Bay-Sacramento Delta ecosystem has emerged as the focal point of a massive state and federal effort to improve water quality and restore biodiversity.

Infrastructure and infrastructure financing: When California’s coastal metropolitan areas were created, mostly in the postwar era,- the state and federal governments contributed greatly to their success by picking up the tab for most of the infrastructure they required. In the last two decades, however, all this has changed. In the Central Valley, the urban infrastructure is underdeveloped, and the financial ability of developers and new homebuyers to bear the full cost of community infrastructure is questionable.

Governmental structure and regional/sub-regional cooperation: In the Valley as elsewhere, a wide range of local, regional, state and federal agencies make decisions that create the emerging landscape. But there is little history of cooperation among these agencies, and especially among local governments. If all these entities can work together well, they can effectively increase the region’s “capacity” to create an urban environment that works for its users while protecting agricultural land, natural resources and other non-urban values. But if these entities do not establish a pattern of working together, the result could be a haphazard pattern of urban growth that does not serve any goal well.

Possible Strategies

Given these background conditions, the Central Valley could adopt any one of a number of strategies for shaping urban growth, or different parts of the Valley could “mix and match” from a variety of possibilities, which include the following:

Concentrate urban growth in existing urban centers. The Central Valley’s urban centers are well established and well served by existing infrastructure. They contain most of the current job centers and community support services and amenities required for urban or suburban living. This strategy would concentrate urban growth in and near these centers through a combination of infill development and compact growth in new areas.

Adopt a “metroplex” strategy. This strategy would recognize that population growth in the Valley will be concentrated in a few large metropolitan areas. Urban growth needs, including urban centers, bedroom communities, parks and greenbelts, should be dealt with at the metropolitan level in a small number of distinct “urban metropolitan regions.”

Create a “string of pearls” along Highway 99. For most of this century, Highway 99 has been the Central Valley’s “main drag.” Virtually all of the Valley’s older urban centers are located along this corridor. One possible strategy would be to concentrate future urban development up and down Highway 99, creating a string of urban and suburban pearls. In point of fact, the string of pearls is already emerging in some places. New development districts are being created along the corridor to the north and south of existing cities and towns because of access to this major transportation artery.

Encourage the creation of new towns in the foothills on the west side of the Valley. The so-called “Foothill Strategy” has been discussed for several years in some parts of the Valley. Foothill new towns would place commuters closer to Bay Area jobs and protect prime farmland on the Valley floor. However, water and infrastructure finance issues make this strategy very difficult to achieve.

Permit the emergence of an urban ladder. A final possibility is to permit the development of what might be called an urban ladder: a network of urban and suburban areas that run up and down the Valley along Highway 99 and Interstate 5, and then run across the Valley on a series of east-west rungs along smaller roads that connect the two freeway corridors. In many ways, the urban ladder is the most likely possibility, simply because it connects existing cities and towns with probable new areas for urban growth by using the available transportation corridors. At the same time, however, it holds the potential to create more “suburban sprawl” than any other option.

Many of these options are already emerging as an actual urban pattern in certain parts of the Valley, and it is unlikely that there is a “one-size fits all” answer for the entire Valley. But, unless the civic leaders of the Valley confront the issue of urban growth head-on, it is likely that the Valley will adopt the sprawling and inefficient land use patterns that characterize Los Angeles and California’s other coastal metropolitan areas.

There is still time to shape a different outcome in the Valley, if civic leaders work together in a conscious attempt to design a set of workable urban development patterns that will operate efficiently and effectively for urban dwellers, for employers, for agriculturalists, and for the natural environment.

William Fulton is editor of California Planning and Development Report, contributing editor of Planning magazine, and correspondent for Governing magazine. For more information about the Great Valley Center, see www.greatvalley.org.

The recent fiscal crisis in Asia has affected systems of taxation and land use regulation throughout the region. The situation in Korea is typical. A series of collapses of large conglomerates led to a severe economic crisis, with 5.5 percent of total loans in default by the end of 1997. Currency and stock indexes fell to one-half their value within a year. Major measures to control the crisis, undertaken in cooperation with the International Monetary Fund (IMF), include cutting government expenses by 10 percent and initiating a series of tax reforms to raise revenues.

In this context, a recent seminar on the taxation of real property in Asia provided a valuable and timely forum for the exchange of ideas. The seminar was hosted by the Organization for Economic Cooperation and Development (OECD) and the Government of Korea at the Korea-OECD Multilateral Tax Center in Chonon in early March. Tax administrators from China, Korea, Singapore and Vietnam attended the two-part program, which included a four-day seminar on property taxation and a one-day workshop hosted by the Korea Ministry of Finance. My fellow instructors in the seminar were Michael Engelschalk of OECD’s Fiscal Division in Paris and Anders Muller of Denmark’s Ministry of Taxation.

Seminar Themes

The seminar addressed three major issues concerning local government systems for property taxation:

Local Revenues and Fiscal Decentralization:

Anticipating increased political and fiscal decentralization in many Asian countries, the seminar explored the role of local government within the national tax structure. These fundamental issues are particularly of interest to China, which is just beginning to develop a property tax system, and Korea, which is beginning to exercise stronger local autonomy.

Market Economy and Property Valuation:

For Vietnam and China, which are moving toward a market-based economy, establishing reliable sales information on property markets and developing effective valuation techniques are major challenges. Korea and Singapore, with their more advanced property tax systems, must be able to respond to a dynamic property market. Singapore’s annual value rating method and Korea’s market capitalization approach are very different systems, and the issue of improving valuation models remained a hotly debated subject during the seminar.

Taxation Administration and Enforcement:

Computerization, a collection process and legal procedures need to be developed and implemented in all governments to improve the efficiency and effectiveness of management and enforcement procedures. Political issues such as assignment of local and central government functions, determining ability to pay and the role of wealth taxation were also discussed extensively by the participants.

Tax Policy Issues in Asian Countries

Although China at present does not permit private ownership of land, three categories of taxes are applied to use rights:

taxes on land use (land use tax, land occupation tax and agricultural tax):

taxes on ownership of buildings (house tax and real estate tax); and

taxes on transactions (land appreciation tax, business tax, stamp duty and deed tax.)

Property tax reform in China is needed for two reasons: redundancy and out-of-date regulations. Even after the economic reforms of the 1980s, foreign investment in real property has been regulated and taxed according to a 1951 law. The central government has decided to reform and simplify property taxes by consolidating the domestic house tax with the land use tax for local people, consolidating domestic and foreign house taxes for foreigners, and possibly eliminating the deed tax.

Korea proposed a land value increment tax several years ago to capture the capital gains from land transactions, but the proposal was defeated. To capture land value increments and avoid speculation, Korea instead implemented a capital gains tax system that covers both real property and other asset transactions. To discourage land speculation, the tax rate will be fixed at 50 percent for property sales within two years of purchase, but owners who hold properties for more than two years will have a lower capital gains tax rate.

Korea’s GNP is expected to grow less than one percent in 1998 and tax revenues are projected to decline by US$4.4 billion. In response, the government designed a package to raise tax revenues by US$2.4 billion and to cut government expenditures by US$5.6 billion. In the tax reform package, minimum tax levels will generally be raised but capital gains taxes on land sales and value-added tax exemptions will be reduced.

Vietnam began reforming its tax system in 1990 with the introduction of uniform tax laws and ordinances across the country. Some examples are the 1994 Law on Agricultural Land Use Taxes, the 1992 Ordinance on Land and Housing Taxes, and the 1994 Law on Taxes on Land Use Right Transfer. Although Vietnam endorses a market economy, these central government regulations set the standard for all taxation administration. Property valuation (use value) is also defined by national law, although the taxable price is determined by the People’s Committee of the province or city, which is directly under central government power. In other words, the valuation is based on market value but must be approved by the People’s Committee.

In Singapore property owners pay an annual tax of 12 percent on the annual value of the property. The annual value for buildings is based on the estimated market rent per annum. The value for vacant land or land under development is derived from five percent of its estimated market value. The total annual tax in 1996-97 constituted six percent of the government’s operating revenue. Other property-related taxes include transfer taxes, inheritance taxes and development charges. Given the dynamic urban real property market and high land prices, the Inland Revenue Authority of Singapore (IRAS), which oversees the taxation system, is continuously developing new valuation and collection methodologies.

In summary, the demand for research on tax policies is critical in Asia. This seminar offered an educational environment where instructors and participants could share basic principles on the taxation of real property and learn from each others’ experiences.

Alven Lam is a fellow of the Lincoln Institute and academic dean of the Land Reform Training Institute in Taiwan.