Una versión más actualizada de este artículo está disponible como parte del capítulo 2 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

En el área metropolitana de Lima, el acceso a la tierra urbana por parte de los sectores populares presenta un historial de problemas que son resultado de la combinación de una ocupación irregular y espontánea de la tierra con políticas de corto alcance para regularizar la tenencia de las tierras. Estas políticas diseñadas para resolver o mitigar la ocupación irregular, en vez de contribuir a una solución, han aumentado el problema.

El seminario, “Los gobiernos locales y el manejo de la tierra urbana: Perú y América Latina”, llevado a cabo en Lima en febrero, reunió representantes municipales, expertos de América Latina y líderes de la comunidad para responder a la siguiente pregunta: ¿Asegura el actual marco regulatorio el crecimiento ordenado y equitativo de Lima y de las otras ciudades peruanas?. El programa fue organizado por el Instituto Lincoln; el Instituto de Desarrollo Urbano CENCA, una organización no gubernamental que basa su trabaja con las comunidades; la Asociación de Municipalidades del Perú, y la Red de Políticas de Suelo de la Coalición Internacional del Habitat (HIC).

Políticas de Regularización

Por regularización de la tierra se entiende en general el proceso de intervención pública en zonas ocupadas ilegalmente, a fin de proveer mejoras de infraestructura urbana y reconocer títulos de propiedad u otros derechos de ocupación. En muchos países en desarrollo se necesitan políticas de regularización para contrarrestar los patrones irregulares, y a veces ilegales, de desarrollo de la tierra, en que la ocupación del terreno e incluso la construcción de viviendas precede la instalación de obras de infraestructura y la documentación legal.

Desde 1961, el gobierno central de Perú ha apoyado políticas que permitieron que la población de bajos ingresos ocupara las tierras públicas vacantes, consideradas como un recurso natural de “banco de tierras”. La mayor parte de estos terrenos eran arenosos, casi desérticos, ubicados en los alrededores de Lima y de poco valor comercial. Un 34% de la población de Lima vivía en “barriadas” o asentamientos irregulares para 1993.

Ante la ausencia de políticas efectivas para asegurar el acceso legal y organizado a la tenencia de la tierra, la permisividad que llevó al desarrollo irregular de estas áreas periféricas ha llevado a una crisis que domina actualmente la discusión de las políticas relativas a la tierra urbana (Figura 1). Muchos funcionarios gubernamentales y otros observadores reconocen que el sistema en sí mismo fomenta y permite el crecimiento informal e irregular, y que algunas de las políticas diseñadas para regularizar la tierra han contribuido en la práctica a crear más irregularidades.

Problemas del Manejo de la Tierra Urbana

El manejo de las políticas de la tierra urbana en Perú está siendo reexaminado a causa de tensiones entre el gobierno central y el gobierno local. Entre 1981 y 1995, las municipalidades administraron los procedimientos, autorizaciones y políticas relacionados con la regularización de la tierra. En 1996, el gobierno peruano centralizó la administración de los recursos económicos sobre la vivienda y el desarrollo urbano, retomando los temas de regularización. Esta centralización política, administrativa y fiscal ha creado serias ineficacias e ineficiencias, puesto que aún las agencias de los gobiernos locales tienen que responder a las demandas diarias de la población con respecto a tierra y vivienda, y no tiene ya un control integral de esta problemática.

También existen tensiones a causa de las contradicciones entre el marco legal y el mercado informal de las transacciones cotidianas. Esta falta de relación se refleja en la falta de comprensión y desconfianza que existe entre las autoridades y los agentes privados e individuos que operan fuera del marco de las políticas formales.

A pesar de los intentos por parte de municipalidades y organizaciones no gubernamentales por mejorar la coordinación e implementación de las políticas de la tierra que afectan a los mecanismos formales e informales del mercado formal e informal, los líderes políticos todavía toman la decisión final. Esta situación se ve sujeta a la politización de la administración pública, por ejemplo, a través de políticas creadas para satisfacer a los políticos en vez de la comunidad. Al mismo tiempo, esta situación fomenta las perspectivas a corto plazo, puesto que la autoridad gobernante está más interesada en el trabajo inmediato que en el seguimiento detallado de planes de desarrollo que requieren de un plazo más largo para su ejecución. Como resultado, los problemas graves de crecimiento de Lima no reciben una respuesta adecuada por el marco regulador, legal y político actual.

Problemas Comunes

Un resultado importante de este seminario en Perú fue el intercambio de experiencias con otras ciudades latinoamericanas y asiáticas, en las cuales los gobiernos locales pueden utilizar recursos públicos para promover ciudades urbano más ordenadas. Aún cuando los problemas del manejo de la tierra son amplios y complejos, ciertos problemas comunes fueron identificados para ser discutidos en programas futuros:

• El desarrollo de políticas públicas e iniciativas a nivel de la comunidad para capturar el valor de la tierra “intermedia” que se encuentra en proceso de desarrollo y es frecuentemente la más vulnerable a la especulación.
• Programas municipales de vivienda que utilicen el marco legal existente para fomentar la ocupación ordenada del espacio. Específicamente, hay una necesidad de promover la coordinación entre los diversos agentes públicos y privados; así como mecanismos que apoyen créditos financieros para la población de bajos ingresos, la construcción de vivienda, los servicios básicos de infraestructura y las estrategias de participación del vecindario.
• Las políticas de regularización de la tierra y su articulación con políticas de acceso a la tierra, a fin de romper el círculo vicioso de irregularidades que causa los problemas actuales de manejo y de crecimiento urbano.
• Una mayor comprensión de la dinámica de los mercados formales e informales de la tierra, por aquellos encargados de desarrollar e implementar las políticas apropiadas para dirigir las complejas actividades vinculadas al mercado de tierras.

Julio Calderón, investigador urbano y consultor en programas de desarrollo social, está afiliado a Red Suelo, la red de políticas de la tierra de la Coalición Internacional para el Habitat.

Figura 1: Políticas de Regularización de la Tenencia de la Tierra en Lima

Febrero 1961-1980: Se estableció la Ley 13517, responsabilizando a varias agencias del gobierno central para regularizar los procedimientos de tenencia de la tierra, pero sólo se emitieron 20.000 títulos.

1981-1995: La función de emisión de títulos fue transferida a la Municipalidad de Lima y la entrega de títulos de propiedad de la tierra aumentó a unos 200.000. En los años noventa la capacidad de entrega de títulos disminuyó gradualmente hasta generar una crisis en el mercado de la tierra.

Abril 1996: La Comisión del Estado de Formalización de la Propiedad Informal (COFROPI) asumió las responsabilidades que estaban asignadas a la municipalidad. A partir de la promesa presidencial de incorporar la población de bajos ingresos al proceso del mercado de la tierra, se entregaron cerca de 170.000 títulos de propiedad entre julio de 1996 y julio de 1997. Se espera que 300.000 títulos más sean emitidos para el año 2000. Sin embargo, COFROPI afirma que el 90% de los títulos entregados antes de 1995 presentan problemas de registro, de manera tal que muchos de los títulos entregados desde 1996 son revisión de otros entregados anteriormente. En consecuencia, es difícil reconstruir la cantidad exacta de títulos emitidos bajo cada administración.

Algunas Definiciones

Ilegal – Ocupación de la tierra que contradice expresamente las normas existentes, el código civil y la autorización pública.

Informal – Actividad económica que no se adhiere a las reglas institucionales y que no está protegida por ellas, en oposición a la actividad formal que opera dentro de los procedimientos establecidos.

Irregular – Subdivisión que está aprobada oficialmente pero que no ha sido ejecutada de acuerdo con la ley.

Clandestina – Subdivisión establecida sin reconocimiento oficial.

Una versión más actualizada de este artículo está disponible como parte del capítulo 6 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Hoy en día la mayoría de los países de América Latina son más urbanos que rurales y están tratando de desarrollar sus economías como partes integrales del mercado global. Este proceso introduce profundos cambios culturales y espaciales tales como mayor segregación y conflictos sobre el uso del suelo urbano.

Es sabida la necesidad de fortalecer la conciencia ciudadana sobre la liberalización de los mercados y la pérdida de protagonismo del Estado en los esquemas de economía y planificación. Este cambio en el papel del Estado —de “proveedor” a “facilitador”— crea un vacío en las necesidades sociales urbanas. Los participantes sugirieron tres abordajes para poder mejorar la gestión del suelo urbano y la igualdad social de manera simultánea.

Primero que todo, utilizar herramientas básicas para establecer y apoyar los sistemas de información urbana: un mecanismo de monitoreo con capacidad para identificar datos de agentes y transacciones, incluidos los precios del suelo; conocimiento de los “ciclos de vida” de las zonas urbanas; y modelos de predicción que permitan establecer la relación entre las economías municipales y nacionales y el mercado de bienes raíces.

En segundo lugar, instituir políticas urbanas que equilibren los mecanismos de mercado existentes, que suelen ser contradictorios. Por ejemplo, es difícil liberalizar los mercados y al mismo tiempo imponer límites en la expansión urbana cuando se intenta ofrecer suministros de suelo adecuados para satisfacer las necesidades de la población pobre trabajadora.

Tercero, reconocer y dar apoyo a las acciones positivas de grupos comunitarios y organizaciones no gubernamentales que se propongan combatir los patrones de segregación de clases, como también a los intentos municipales de utilizar instrumentos como reservas territoriales, mecanismos de financiamiento progresivos y mejoras en los procedimientos administrativos y fiscales.

Uno de los mayores problemas de la planificación territorial en América Latina es encontrar el “borde” de la ciudad, especialmente cuando la tenencia y ocupación del suelo responden a la necesidad social, más que a la ley. Entre las formas de propiedad urbana que funcionan fuera de los reglamentos comerciales está la tierra mantenida bajo el sistema de ejido , que ocupa más del 50 por ciento del territorio mexicano y forma parte de las zonas metropolitanas más importantes. El ejido dificulta el crecimiento natural del mercado de bienes raíces y propicia la expansión de mercados secundarios (informales) descontrolados.

Estos y otros temas afines concentraron la discusión en una reunión que tuvo lugar en México en el mes de abril. En ella, peritos y personalidades académicas compartieron sus puntos de vista sobre los procesos que afectan el orden territorial urbano y los instrumentos disponibles y necesarios para poder lograr una intervención pública eficaz, conducente al logro de objetivos de igualdad social y planificación territorial. Si bien los participantes del seminario manifestaron sus inquietudes por el efecto a largo plazo de la globalización en América Latina, también reconocieron que el escenario de acción, al menos durante los años venideros, será a nivel municipal más que a nivel nacional.

Sobre los autores

Luis Fernando Alvarez es investigador principal del Centro de Estudios Metropolitanos, Centro Universitario de Arte, Arquitectura y Diseño de la Universidad de Guadalajara, México.

William J. Siembieda es profesor de planificación de la Escuela de Arquitectura y Planificación de la Universidad de Nuevo México. El seminario sobre temas de suelo urbano y reserva territorial fue copatrocinado por el Instituto Lincoln y por el Centro de Estudios Metropolitanos en la Universidad de Guadalajara.

If cynics know the price of everything but the value of nothing, then they may have something in common with contemporary American planners. Constrained by the courts, the planning fraternity sometimes appears to have spent the last decade rationalizing nexuses and quantifying costs without really addressing the social and environmental values that should underpin the planning process. Under assault from those criticizing government, as well as from the property rights movement, the profession seems to have retreated into the land of that dismal science, economics. This allegation has been made in a number of ways over the past few years by critics as diverse as New Urbanist architects and, in England, the Royal Family. Is it really justified?

This article is written from an English perspective and is based on research into the types of planning tools used in the United States to minimize the adverse effects and costs of development or to maximize public benefits. The intention is to adapt the best American practices for future use in the United Kingdom.

A broad analysis of the types of policy processes presently being used highlights an amazing breadth and depth of local policy innovation. The accompanying table outlines the range of policies found, broken down either by the way they have been justified or the process that has been used. This “family” grouping may help in suggesting other types of policies that can be used to achieve similar goals. It may also provide a useful reminder that the policies are always supposed to achieve aims, and that those aims should always be in a constant state of review.

The policies span a wide range. Some are not traditionally thought of as land use or planning policies. Indeed, in many cases the policies are not promoted with any explicit intention of achieving specific land use goals. They are, however, all capable of directly affecting land use patterns and, properly used, can all realize benefits to the community.

Purpose Policies

Harm, quality of life and control policies are all well-accepted planning tools. They work to prevent development in inappropriate areas–on wetlands or in congested districts, for example–or to require development in certain places. For the most part these policies do not offer any new lessons to UK planners. However, their scope is widening. New harms are being defined, such as air quality, lack of public transit accessibility and effects on the water table.

In addition, new, more limited types of land interests, such as easements and deed restrictions, are being used as controls, and new actors are becoming involved. For example, in South Florida the Water Management District is now a major purchaser of land and development rights, working in loose alliance with planning authorities. School boards, forest preserve districts and private utility companies have also become more interventionist.

Nevertheless, the main areas of experimentation are in other family groups. Cost policies are being used more proactively and are being expanded in scope. Fees are being used to either encourage or discourage development in particular locations. In San Diego impact fees in outlying zones have been set at economically prohibitive levels to deter development. In Dade County, Florida, road impact fees are banded and fees increase towards the urban fringe. In Montgomery County, Maryland, certain fees are waived when affordable housing is provided.

Cost policies can also be used to raise revenue to meet off-site costs for nontraditional “infrastructure.” In Boston and San Francisco linkages have been identified between the construction of new offices and the need for housing, justifying the extraction of money sums. In principle the range of these fees could be expanded. The City of San Diego already charges developers for new libraries, fire stations and other community facilities, and includes some future maintenance costs. In rapidly growing areas, the public costs of new health infrastructure, hospitals and clinics might also be considered.

Some municipalities have considered the possibility of charging “disassociation fees” that recognize the cost to the community of development away from central cities. “Historic investment” or “recoupment” fees could account for the cost of past provision of infrastructure. In the case of schools or hospitals, a charge could also be made to reflect the cost of wasted desk and bed capacity in the area from which migration has occurred. Alternatively, fees could be charged for the “softer” social costs of increasing the distance that citizens need to travel to reach open space or to reflect the additional stress that occurs from lengthy journeys through strip development.

Process Policies

Market policies have been described as creating “a currency in the public domain that [can] then be traded.” Unsurprisingly, new markets have developed swiftly, responding to local conditions. These policies generally require zoning that sets limits on development at lower levels than the market would otherwise build. A release from that limitation can then be “sold” or transferred for use either on or off site. Seattle, New York state, Maryland and New Jersey lead the way with policies of this type, creating the necessary currency in the form of bonus floor areas and transferable rights. They also provide “market” infrastructure such as credit banks in some cases. In Florida the private sector has set up profitable “mitigation banks” that reclaim damaged land to create mitigation credits for future use by developers whose projects would threaten wetlands. Private sector sales of “utility credits” also occur.

Fiscal policies are all too often seen as intended simply to raise revenue. Yet they can also guide land uses and capture public benefits from increases in the development value of private land. In some Business Improvement Districts, such as those in Miami Beach and Chicago, increased tax assessment streams have been bonded and the proceeds spent on capital works achieving planning aims. In San Diego’s special assessment areas the cost of new social infrastructure, such as parks and libraries, is borne in this way.

In some areas it is possible to secure contributions towards public works that lead to private benefits, for example when major new transport links or services are provided. In downtown Miami, businesses that benefit from a transit system pay a property assessment that meets the county’s share of the original infrastructure cost.

The final two categories of policies are important for different reasons. Adequate transitionary policies are essential. Politically and legally it is difficult to introduce new policies unless careful attention is paid to minimizing or mitigating the immediate costs. Providing for a lengthy period of introduction, or providing compensating credits, as in Montgomery County, may offer some comfort. In some areas “reversionary” permits have been proposed, where development rights revert back to an earlier or less valuable use if they remain unimplemented for a period of time. The miscellaneous policies provide clear means for enforcement. All too often well-intentioned policies are not rigorously applied. Agreements may allow easier control and greater certainty.

Conclusion

It is clear that a large number of policy tools are available to and used by American planners. The opening criticism questioned their fixation with economics. While economic issues are and always should be part of the planning process, the scope of planning policies itself shows that planning is about more than economics. However, it has also become apparent that planners tend to use only a limited range of instruments, even when alternative approaches might better achieve their policy goals.

For a variety of legal and institutional reasons, municipalities understandably concentrate on those policies that they have already used and that have worked. Notwithstanding that, to an English planner the American system as a whole offers a mouthwatering array of policy feasts. It is a shame that so many planners operating within the system only nibble at the corners of a table that is groaning with the weight of possible delights.

Stephen Ashworth is a visiting fellow at the Lincoln Institute and a Harkness Fellow in a program sponsored by the Commonwealth Fund of New York. In the United Kingdom he is a partner in the firm of Denton Hall, Lawyers. This article is drawn from his research on “Harnessing Land and Development Values for Public Benefit.”

In the past quarter century, the People’s Republic of China has achieved remarkable progress in economic growth, social advancement, and political and administrative reforms. These achievements are largely attributed to the commitment of the Chinese government to improve its people’s welfare through adherence to a free market economy. The interrelated forces of economic growth and policy reform are stimulating rapid and fundamental transformation, especially in Chinese cities, where infrastructure projects, urban renewal, housing development and reform of state-owned enterprises are taking place at an unprecedented pace and scale.

The catalyst for this surge in urban development has been the widespread adoption of the Land Use Rights System (LURs) in which land ownership and use rights have been separated. Its impacts are two-fold. First, it promotes the development of markets for land use rights in which land prices and market mechanisms begin to affect land use and land allocation decisions. Second and more important, it creates an institutional capacity for local governments to raise much-needed revenues to finance urban redevelopment and economic reforms. This revenue-raising ability is rooted in the land ownership structure and power of Chinese government, since the state owns virtually all land in cities and towns. Users are required to pay upfront leasing fees for 40- to 70-year periods, depending on the type of use.

Along with its fiscal impacts, the LURs has created several problems that have drawn increasing attention. First, revenues from leasing state-owned land are not sustainable from a long-term perspective; leasing of existing urban land has been the primary revenue source for financing urban projects, and sooner or later cities will run out of urbanized land available for leasing. For example, Hanzhou City will collect 6 billion RMB (US$732 million) in 2003 from the sales of land use rights, most of them on existing urban land, but land sale revenues have already reached their peak and have started to decline.

Second, Chinese governments lack instruments to capture their share of the increases in land value that are driven up by the combined forces of urbanization, public investment in infrastructure and private efforts. Based on the proposition that one should be rewarded only for one’s own effort, government should capture the increased land value resulting from public investment, rather than having it accrue to the private landowner.

Third, laws do not specify concrete measures for implementing lease renewals. It will be more difficult to collect leasing fees in the renewal period since local governments will have to deal with thousands of households compared to a small number of developers in the first round of leases. Finally, some local government officials have been politically motivated to create an oversupply of land and overheated real estate activity, thus diminishing the central government’s efforts to institutionalize land management and urban planning.

Compulsory Land Acquisition

The other major source of land revenues for local governments is the leasing of former farmland. Both the Chinese Constitution and the 1999 Land Administration Law (LAL) specify that the state, in the public interest, may lawfully requisition land owned by collectives, thus setting the stage for compulsory land acquisition. The local government is thereby able to acquire land cheaply from farmers and sell it to developers at much higher prices. This is a complicated process because it requires first acquiring the land, then converting it to state ownership, resettling the displaced farmers and providing urban infrastructure before finally leasing the land to developers. The law requires that peasants’ lives should not be adversely affected by land acquisition. However, this requirement is difficult to implement, in part because measures of life changes for peasants are multifaceted; financial compensation is only one of the considerations.

Since there is no market data for farmland prices, the government pays collectives and peasants a compensation package that includes three components: compensation for the land itself; resettlement subsidies; and compensation for improvements to the land and for crops growing on the requisitioned land. The law stipulates that compensation for cultivated land shall be six to ten times the average annual output value of the acquired land for the three years preceding the requisition.

The amount of the resettlement subsidies depends on the number of people living on the land, but each person’s subsidy shall not exceed six to ten times that of the annual yield from the occupied land. Recognizing diversity of local conditions in terms of socioeconomic development status, productivity, and per capita income, the local government is permitted to raise the sum of the resettlement subsidies and land compensation up to 30 times the previous three years’ average output value on the acquired land.

Emerging Issues

Several significant issues are emerging from this land acquisition process. The first relates to the ill-defined concept of property rights and development rights: who is entitled or empowered to acquire land from peasants for urban development? Currently any entity can acquire land from peasants as long as it can justify public interest or purpose. This public interest requirement was easy to fulfill in the 1990s, since there were many state-owned enterprises that provided services and/or goods to the public. They could acquire land to launch profitable commercial, housing, entertainment and industrial development projects. Individual developers also can acquire land if they have strong political connections. However, these profit-making and political motivations for land acquisition are responsible for increasing corruption in real estate and housing developments and creating chaotic and uncoordinated urban development patterns. Recent economic reforms and privatization have begun to diminish the roles of state-owned enterprises, so it is time to reexamine the concept and definition of public interest and public projects.

The interactions of multiple players in land acquisition (including individuals, corporations and governments) create several problems in land management and planning: (1) it becomes extremely difficult, if not impossible, to coordinate land development so that infrastructure and transportation facilities are used efficiently; (2) it voids many urban planning efforts; and (3) it is blamed for “villages in the city” (cheng zhong chun), a phenomenon in which villages and farmland are surrounded by developed land, making the city unattractive, disrupting the continuity of economic, social and cultural functions, and significantly increasing transportation costs.

The second issue is who is entitled to compensation and at what level. The village collective is the basic socioeconomic organization in rural areas, and its largest asset is the land collectively owned by the members. Even though laws recognize that both the collective and its members should be entitled to sharing compensation, there are no specific policy guidelines or regulations on how to divide the shares in different situations. The collective’s share is supposed to enhance its capacity in farmland productivity and social welfare, thus benefiting all its members. However, the role of the collective is diminishing, in part because its membership is decreasing as some farmers leave to become urban residents following acquisition of communal land, and in part because of socioeconomic changes due to advancing urbanization. The revenue sharing scheme reflects this transformation.

To make matters worse, different levels of governments take a cut out of the monetary compensation that is supposed to go to the farmers. For example, the Chinese government built a pipeline that transfers natural gas from the western to the eastern part of the country. This was a national project, so compensation to peasants was paid by the state, but the amount of compensation varied from province to province. The state gave 20,000 RMB (US$2,500) per mu (one mu=666.67 square meters) to peasants in Henan province for their land. Given the fiscal structures between governments, these funds were allocated downward to lower levels of government (from state to province to city to county to township, respectively). At each transfer point, a portion of funds was retained for that level of government to finance their own public goods and services. The peasants received only 5,000 RMB in the end.

The situation here is similar to the concept of value capture in which governments are entitled to retain a portion of land value increases in exchange for their efforts in urban development and infrastructure provision. In a case like Henan it is legitimate to ask if the state’s compensation reflected the true market value of the land. If it did, then local governments should be entitled to their shares. Alternatively, if the state captures the entire land value increase, then the state should reimburse at least the costs of infrastructure provisions supplied by the local government.

The third issue is the equity of compensation, which involves both the level of compensation as well as variations in payments in different situations. Since there are no market data that can truly reflect the price of farmland, compensation hardly reflects market conditions and it varies dramatically from case to case, mainly depending on who plans to develop the land. For instance, profitable projects such as commercial housing and business developments can afford to pay higher prices for land than public transportation and infrastructure projects such as highways, railroads, airports and canals. If these different types of projects, private and public, occur in one village at different times or in neighboring villages at the same time, peasants who are less well compensated feel unequally treated by the government. Many complaints have something to do with this inconsistency in compensation. Such inequity contributes to rising tensions and distrust between peasants and the government and adversely affects subsequent planning and implementation of land management policies.

Finally, it is becoming increasingly difficult and costly to resettle peasants. The LAL requires that the quality of life of farmers shall not be adversely affected by compulsory land acquisition, but does not specify concrete measures to achieve this goal. As a result, many peasants end up living under worse conditions several years after their land was taken than they did before. This situation is not difficult to imagine. Farming does not make peasants rich, but it generates sufficient income to support a minimum level of livelihood and security. Without appropriate training and skills in managing their lump sum payment and without appropriate investment channels (if their compensation is sufficient to make any investment at all), it is common for peasants to end up with no land to farm, no income stream to support themselves, and no job skills to compete in the tight urban job markets.

Land Policy Challenges

China is facing many challenges in its efforts to supply land for new development as rapid urbanization continues. First, it is becoming more difficult for local governments to acquire land for true public works and transportation projects, since they cannot offer peasants as much compensation as developers of more profitable commercial projects.

A second challenge is to fairly compensate peasants when their farmland is acquired. As governments capture a greater proportion of the land value increases, the low level of compensation to peasants imposes a serious long-term threat to sustainable development in China. The number of people who live in poverty after land acquisition continues to rise. For instance, Zhijiang province alone has more than 2 million farmers who have lost their farmland. In 2002, more than 80 percent of legal cases filed by peasants against governments in the province were related to land acquisition.

This situation is a potential source of instability and is likely to escalate in the future as increasing urbanization puts even more pressure on the need for new land for development. According to the General National Land Use Comprehensive Plan, China needs 18.5 million mu of land for nonagricultural uses in the first decade of the twenty-first century, and 90 percent of that land will be acquired from farmers. It is estimated that 12 million farmers will lose their land through this type of acquisition. Without fair compensation or other efforts to assure their social security over the long term, these farmers will impose enormous socioeconomic problems on China for years to come.

The third challenge is associated with the rate of urbanization. According to the report of the 16th Communist Party Convention in 2003, the total population of China is estimated to be 1.6 billion to1.8 billion by 2020, with more than 55 percent living in cities, compared to the current population of 1.3 billion with 38 percent in urban areas. Migration from rural areas to cities is expected to be around 15 million annually, after taking into account the rate of natural urban population growth. Sustainable and affordable urban economic development is urgently needed to absorb these large numbers of rural immigrants.

A final dilemma is how to achieve a balance between farmland preservation and urban spatial expansion. Farmland preservation will inevitably increase land costs, which in turn will slow down urban development. At the same time, it is necessary to promote urban economic growth to provide sufficient job opportunities. This in turn leads to urban encroachment into rural areas to take advantage of less expensive land.

To address these challenges, Chinese officials need to ask some fundamental questions:

• What are the impacts of urbanization and infrastructure provision on the value of farmland, and how do the values change over space and time?
• Who is entitled to the value increases in land, and what is the peasants’ fair share?
• What constitutional rights do peasants possess? Will the Chinese Constitution be amended soon? If so, what will be the impacts?
• What are some other mechanisms of capturing land value? What are the merits and drawbacks of these mechanisms, and will they work in China? If so, how can the government make them work?

Land Acquisition Reform

It is hard to anticipate how Chinese officials will address these questions, but rapid urbanization and massive infrastructure provision will inevitably increase land values over the next two decades. Recognizing the enormous problems associated with land acquisition, several cities have adopted different approaches to protect farmers’ rights and interests so their lives will not be adversely affected. These approaches include:

• Joint ventures (Shanghai). Collectives share stock in the land they transfer for projects. In return, they receive annual cash payments equivalent to average profits from farming.
• Extra allowance for construction on land in villages (Shuzhou). Local governments strictly control the amount of nonagricultural construction on land owned by a collective. By providing an extra allowance for nonagricultural land, villages are able to pursue economic activities other than agriculture and are able to generate income simply by renting out their land for nonagricultural purposes.
• Combination of cash resettlement and provision of social security funds (Zhuzhou and Jiaxing). The population in a village where land will be acquired is divided into three age groups: youth, adults and elders. The younger residents are paid a cash compensation. The cash compensation for adults is double the youth amount and half of it is earmarked for job training. Those two groups are compensated upfront in a lump sum payment. The local government establishes a social security fund for the elderly so they are paid on a monthly basis rather than in a lump sum fashion. The amount of their pay is equivalent to the minimum standard set by governments for urban laid-off workers.
• Compensation based on location, not previous land use (Nanjing City). This example is closer to compensation based on farmland markets.

The Chinese government is taking other measures, such as attempting to make the land acquisition process more transparent so farmers know where and when their land will be acquired and how much they will be compensated for it. This transparency will also help to reduce corruption and improve land management. There is also an urgent need to establish legal channels for farmers to file appeals and protests against governments in compulsory land acquisition cases. The development of farmland markets may challenge land acquisition and also may have substantial impacts on fiscal policy and government financing.

All of these efforts will change both the way land will be taken from farmers and how the issues and challenges of land acquisition will be addressed. Although it is too early to predict how and to what extent these measures and reforms may affect urban and rural development, China is certain to be one of the most fascinating and dynamic places for continuing research and study of land policy reform and societal transformation.

Chengri Ding is associate professor in the Department of Urban Studies and Planning at the University of Maryland, in College Park. He specializes in urban economics, housing and land studies, GIS and spatial analysis. He is also special assistant to the president of the Lincoln Institute for the Program on the People’s Republic of China.

Note: RMB is the Chinese currency; US$1=8.20RMB.

The Lincoln Institute’s China Program was established several years ago, in part to develop training programs on property taxation policy and local government finance with officials from the State Administration of Taxation (SAT). The Institute and SAT held a joint forum on international property taxation in Shenzhen in December 2003, and more than 100 participants attended another course held in China in May 2004. In January 2005, 24 Chinese tax officials from 15 provinces visited the United States for additional programs; many of them are developing property tax systems in six pilot cities. The Institute also supports the Development Research Center (DRC) of the State Council to research property tax assessment in China, and they jointly organized a forum in February 2005.

Economic growth and institutional reforms in China over the past two decades have created profound changes within the society. The central authorities now need to set forth new policies and procedures for modern governance to address devolution of certain authority to local governments, rapid urban and rural development, and changes in land uses and land and fiscal policies. The national government’s commitment to further modernization is most evident in the effort to develop and implement a new property taxation system.

This article describes the current system and discusses issues and challenges that must be overcome to implement a successful property tax policy in China. Given the complexity of this endeavor and the huge variation in economic development across the country, a gradualist approach, which has proved effective in China’s modernization process, may be the best way to initiate property tax reform and development.

Current Taxation System

China collects 24 types of taxes. The central and local governments share the value added tax (VAT) and business tax revenues; the former tax is the primary revenue source for the central government, whereas the latter is the most important tax for local governments. Two other important tax sources for the central government are the consumption (excise) tax and the personal income tax. Twelve taxes are related to land and property, but most do not generate significant revenues. The business tax accounted for 14.41 percent of total central and local government revenues in 2002, but only a small portion of that amount was generated from property-related sources. The reason is that business and income taxes are collected only when land or property is rented or sold, and thus do not provide a steady stream of revenue. It is hard to imagine that any of the 12 property-related taxes could play a key role in resource allocation and local government finance over the long term.

An evaluation of the current tax system reveals additional concerns.

• The tax structure is out of date. The urban real estate tax was developed in 1951 and several other taxes, including the farmland occupation tax, the urban land use tax and the housing tax, were institutionalized in the late 1980s. Given the tremendous advances in economic and institutional reform since then, China’s tax system needs to be updated to function effectively within this new context.
• Domestic and foreign entities operate under differing tax bases and rates. The Chinese government offers tax incentives to foreign entities to attract foreign direct investment that domestic investors do not receive. In addition, domestic land users pay the urban land use tax and housing tax, whereas foreign land users pay the urban real estate tax. Furthermore, structures used for commercial or industrial purposes in rural areas do not pay any land- or property-related taxes. As a result of these differing tax policies, the overall tax rate for foreign enterprises is generally 10 percent lower than that for domestic enterprises.
• Several of the taxes are redundant. For example, the business tax and housing tax are both based on housing rental income; the land value incremental tax, enterprise (corporate) income tax and personal income tax are all based on the net rental or transaction income from property.
• Land and property taxes are levied on transactions rather than asset holdings. This arrangement produces a market-dependent revenue stream and is vulnerable to fluctuations over time.
• The tax base is narrowly defined. Properties used for commercial purposes are subject to certain taxes, but residential properties are exempt.
• The tax system is not well equipped to address the complexities of emerging market development. For instance, current land and property taxes impede the development of real estate markets for mortgaging, re-renting and subleasing transactions.

The shortcomings in the current taxation system have resulted in major fiscal problems for the central government, such as declining revenue mobilization and ineffective use of tax policy to leverage macroeconomic policy (Bahl 1997). When the government conducted tax reform in 1993 to overcome some of the problems, one of the largest initiatives shifted responsibility for urban and public services to local governments.

This measure was successful in improving the central government’s fiscal condition; however, the revenue share for local governments was not increased at a level commensurate with their increased responsibility. Consequently, many local governments face increasing budgetary deficits. Figure 1 illustrates the financial deficit for local governments after the 1993 tax reform. More than one-third of county-level governments have serious budget problems and over half of the local governments directly below the provincial level have budgets that merely cover the basic operations of public entities.

Public Land Leasing

One of the means by which local governments increase revenues in the absence of an effective taxation system is through public land leasing. In the late 1980s and early 1990s, the state introduced market principles into the decision-making process regarding land use and allocation by separating land use rights from ownership. This separation promotes the development of land markets, which in turn have created tremendous impacts on real estate and housing development, urban land use and land allocation. Except for a short yet dramatic drop in the early 1990s due to a macroeconomic policy designed to prevent the national economy from overheating, the prices for access to land use rights and public land leasing rates have been increasing steadily.

Despite the significant number of land leasing transactions, the government closely regulates and controls the amount of land being leased by maintaining a monopoly on land supply (Ding 2003). Most land in rural areas still belongs to the collectives, and urban construction is prohibited on rural land unless it is first acquired by the state. Land developments that occur on collectively owned rural land are considered illegal, and administrative efforts such as monitoring and inspecting have been implemented to eliminate these violations.

General land use plans and regulations to preserve cultivated land further control the amount of land available for urban development. The land use plans determine the total amount of land that can be added to existing urbanized areas through an annual land supply quota. At the same time, China’s preservation policy for cultivated land influences both land supply and the location of land available for urban development. The Land Administration Law specifies that at least 80 percent of cultivated land should be designated as basic farmland and prohibited from land development. Land productivity is the dominant factor used to delineate the boundaries of basic farmland. Since most cities are located in areas with rich soil resources, farmland protection designations commonly exist in urbanizing areas. Thus farmland protection inevitably results in urban sprawl and leapfrog development patterns requiring costly infrastructure investments and land consumption.

Financing Local Government. As a result of the government’s regulations and monopoly on selling land use rights, local authorities use the public land leasing system to increase their revenues through land use conveyance fees. For instance, Hangzhou City, the capital of Zhejiang Province with a population of almost four million, is among the top five in per capita national income and GDP. The city generated land conveyance fees of more than six billion YMB in 2002, more than 20 percent of the total municipal government revenues.

Interestingly, these fees were generated largely from selling to commercial users the right to access the state-owned land, yet commercial land development represented only 15 percent of total land uses in newly developed areas. The rest of the land was allocated to users through negotiation in which the sale price either barely covered the costs of acquiring and improving the land, or land was offered free to generate competition for businesses and investments.

Local governments can raise enormous revenues from limited-market transactions of land use rights, in part because land conveyance fees represent lump-sum, up-front land rent payments for a leasing period and in part because local governments exercise their strong administrative powers to require farmers to sell their land at below-market rates. When the government later resells the land at market rates, the price could be more than 100 times the purchase price. After considering the costs of land improvement, however, net revenues may be only ten times the total cost of the land.

Rising land prices resulting from the government monopoly allow local governments to use the land as collateral to borrow money from banks. These loans plus the revenue generated from conveyance fees accounted for 40 to 50 percent of the Hangzhou municipal government budget in 2002. In turn these revenues were used to fund more than two-thirds of the city’s investments in infrastructure and urban services.

Hangzhou City specializes in textiles, tourism, construction and transportation, and generates substantial revenue from business and value-added taxes, although the city’s share of income generated through the public land leasing system is also large. Many smaller cities and towns with fewer commercial and business resources use land leasing directly through land conveyance fees or indirectly as collateral to support up to 80 or 85 percent of their total investments in urban initiatives. These smaller cities must turn to land to generate revenues to fuel economic growth, launch urban renewal projects, and provide infrastructure and urban services that were neglected for a long time prior to the reform era. Land-generated revenue is also used to improve the overall financial environment, attract businesses and investments, and support the reform and reallocation of state-owned enterprises.

Negative Consequences. Despite the importance of public land leasing for income generation, the practice of using this tool to finance local governments may have serious consequences in the long run. The fiscal incentives that compel local governments to control and monopolize the land markets will negatively impact real estate and housing development, industrialization and land use. Furthermore, land is a fixed resource and ultimately there will be no more land left to lease for revenue.

Increasing pressure to protect the rights of farmers also makes it more difficult and costly to acquire land from farmers. As a result, local governments must increase land prices or face reduced revenues from land leasing. Finally, not only does land scarcity and farmer compensation pose a challenge to income generation, but recent policy reform now permits land owned by a collective to enter the land market directly. This change will prevent local governments from acquiring collective lands and exacting conveyance fees for these transfers.

Taxation Reform: Principles and Challenges

The fiscal deficits experienced by local governments and the problems with the resulting public land leasing system provided the impetus for the central government to restructure the entire taxation system. That reform is based on four guiding principles: (1) simplify the tax system; (2) broaden the tax base; (3) lower tax rates; and (4) strictly administer tax collection and management. The central authorities in charge of tax policy and administration offer several specific goals with respect to property-related taxes.

• Unify the tax system so that domestic, foreign, urban and rural entities are treated similarly.
• Terminate taxes at odds with efforts to foster the emergence of healthy land and real estate markets, such as the farmland occupation tax.
• Merge the housing tax, urban real estate tax, and urban land use tax into a single property tax, and treat domestic and foreign entities equally in levying this tax.
• Adopt a value-based property tax.

Considerable debate exists over the merits of the proposed property-related tax reform. Despite the lack of consensus as to the best option, the costs and benefits must be assessed to effectively guide the development and implementation of a new property tax system. In addition, several outstanding issues need to be resolved in order to implement the proposed land and property tax reform.

• What are the existing laws and statutes relevant to property rights and taxation, how will they be amended and how will new laws be developed to legislate the new system?
• What role will property taxation play in intergovernmental fiscal relations and local government financing?
• What will the objectives of property taxation be as a fiscal and land use tool?
• How should land and property taxation be tied to the concept of achieving value capture and financing urban infrastructure and services?
• How will the land and property tax system relate to and be consistent with land policy reforms such as public land leasing, land acquisition, and the development of land markets in urban and rural areas such as agricultural farming?

The implementation of a value-based tax also will require the assembly and cataloguing of massive quantities of data, which historically have not been collected systematically. Furthermore, the data that have been collected are stored in different locations and in paper format. The Ministry of Land and Resources records and handles land-related data and information, whereas the Ministry of Construction is in charge of structure-related information. Matching related records from different ministries and digitizing this data will take years if not decades and will require a huge investment of resources.

The Chinese public has limited understanding of property taxation systems, so education will be required to avoid potentially significant political resistance. Capacity building within the Chinese government also will require professional training in appraisal, evaluation, appeals and collection to achieve effectiveness and efficiency in the new tax system.

Conclusions

Despite these unanswered issues and challenges, the Chinese government appears committed to implementing property taxation reform. The application of the widely used and successful gradualist approach for implementing policy and institutional reforms will ensure that the development and institutionalization of the property tax system proceeds on course. For example, data for industrial and commercial structures is more complete and of higher quality than data for residential structures. Furthermore, newer structures tend to have better records than older structures, and records are more complete for structures in urban areas than in rural areas. Thus, applying the property taxation system first to commercial and industrial structures, newly developed land with residential structures, and urban areas will allow the system to take hold before attempts are made to implement change in the areas with greater obstacles to overcome.

References

Bahl, Roy. 1997. Fiscal policy in China: Taxation and intergovernmental fiscal relations. Burlingame, CA: The 1990 Institute.

Development Research Center. 2005: Issues and challenges of China’s urban real estate administration and taxation. Report submitted to the Lincoln Institute of Land Policy.

Ding, Chengri. 2003. Land policy reform in China: Assessment and prospects. Land Use Policy 20(2): 109-120.

Liu, Z. 2004. Zhongguo Suizi Gailan. Beijing: Jinji Chuban She. (China’s taxation system. Beijing: Economic Science Publisher).

Lu, S. 2003. YanJiu ZhengDi WenTi TaoShuo GaiKe ZhiLu (II). Beijing: Zhongguo Dadi Chuban She. (Examination of land acquisition issues: Search for reforms (II). Beijing: China Land Publisher.)

Chengri Ding is associate professor in the Department of Urban Studies and Planning at the University of Maryland, in College Park. He specializes in urban economics, housing and land studies, GIS and spatial analysis. He is also special assistant to the president of the Lincoln Institute for the Program on the People’s Republic of China.

Harmful impacts of sprawl in terms of air and water pollution, waste of energy and time, traffic congestion and highway accidents, lack of affordable housing, increased flooding, and loss of biodiversity have been widely documented (Platt 2004, ch. 6). Also, the fiscal impacts of sprawl on local communities have been evaluated by researchers at the Brookings Institution, the Lincoln Institute of Land Policy, and elsewhere.

Slaying the “beast of sprawl” has been the Holy Grail of planners and land use lawyers for decades, stimulating the development of new tools like planned unit development (PUD), cluster zoning, subdivision exactions, preferential taxation of farm and forest land, transfer of development rights (TDR), state land use planning, and growth management. Reflecting the antisprawl fervor of the 1970s, a prominent policy report titled The Use of Land euphorically declared:

“There is a new mood in America. Increasingly, citizens are asking what urban growth will add to the quality of their lives. They are questioning the way relatively unconstrained, piecemeal urbanization is changing their communities and are rebelling against the traditional processes of government and the marketplace.” (Rockefeller Brothers Fund 1973, 33)

An architect who specializes in urban and regional planning, Eduardo Reese is the deputy administrator of the Institute for Housing of the Province of Buenos Aires, Argentina. In previous professional positions he provided technical advice for the master plans of more than 20 cities in Argentina; was secretary of socioeconomic policies at the Ministry of Human Development and Labor of the Province of Buenos Aires; adviser for the Urban Planning Counsel of the City of Buenos Aires; and planning secretary in the City of Avellaneda.

Reese also teaches at the Conurbano Institute at the National University General Sarmiento in Buenos Aires. Currently he is a professor of urban management in the Institute’s B.A. program in urbanism. He also teaches urban development at master’s programs at the School of Architecture, Urbanism and Design of the University of La Plata, as well as at universities in Mar del Plata and Córdoba. In addition, he directs the master planning of the Matanza-Riachuelo watershed in Buenos Aires.

Land Lines: How long have you been involved with the Institute’s Latin America Program?

Eduardo Reese: My relationship dates back to 1997 when we were drafting the plan for the City of Córdoba, which included several large-scale urban projects. We worked to expand the debate about the impacts of these projects on the land market and, consequently, on shaping the city. I continued to participate in various activities, and four years ago I took over the coordination of the annual lectures of the Land Management in Large Urban Projects series, following the death of Mario Lungo, who had led that program for many years.

In 2004, in conjunction with the Conurbano Institute of the National University of General Sarmiento, we conducted a course on Land Markets: Theory and Tools for Policy Management, which was the first one involving a seven-month training program for 50 Argentine students. That educational experience helped create a critical mass of technicians and professionals with an innovative vision toward the management of land policies. The program’s impact has been reflected in urban policy decisions in different municipalities (such as San Fernando and Morón in Greater Buenos Aires); in the Argentine Constitution; in the Urban Reform Movement in 2005; and in academic changes at the Conurbano Institute itself.

Land Lines: What role can large urban projects play in the quality of life of Latin American cities?

Eduardo Reese: Large-scale projects in defined sectors of the city (both central and peripheral areas) have been great protagonists of contemporary urbanism in the past quarter century. Today in Latin America there are many types and sizes of projects, even though more rigorous theoretical thinking is still needed. Important examples are the Bicentennial Portal (Portal del Bicentenario) projects in Santiago de Chile; the Integral Urban Projects (Proyectos Urbanos Integrales) in Medellín, Colombia; urban operations in different cities of Brazil; and the restructuring project in the northwestern sector of San Fernando (Argentina).

Large-scale urban operations as instruments of intervention in the city have been implemented for many decades. In Buenos Aires, for instance, the Avenida de Mayo and the Diagonals, which were planned around 1880, had important impacts on physical space as well as in social, economic, and symbolic aspects. This approach of multiple impacts undoubtedly allowed better assimilation of the Avenida de Mayo, but it also generated a huge debate over who should finance the operation and who would appropriate the land rents generated. Ultimately the Supreme Court ruled that the municipality could not finance the work with the surplus created because the rents belonged entirely to the landowners. For many years this case set a judicial precedent regarding the state’s intervention in the process of valuing land generated by a large-scale public project.

Land Lines: You have a critical view on the widely acclaimed Puerto Madero urban regeneration project in Buenos Aires. What would you do differently in other large redevelopment areas?

Eduardo Reese: Puerto Madero is emblematic of urban projects that promote a model of segregated urban planning and are now being “exported” to other countries as a basic tool to compete for international investment. In this project the state submitted to the market and allowed the construction of an exclusive neighborhood for very high-income sectors. It is a notorious example of public policy explicitly designed to favor the wealthy segments without any recovery of the huge land valuations that were the product of public policy.

Moreover, to guarantee investors an overvaluation of the properties they purchased, the venture has a number of features that cut it off (physically and socially) from the rest of the city, creating even greater value because of its segregation. Puerto Madero has no external wall, as gated condominiums have, but rather multiple implicit, explicit, and symbolic signals that clearly indicate this place is off limits to most of society.

• It is the only neighborhood managed by a state corporation that for 19 years has paid the salaries of public servants and managers to build and maintain a few square meters of park accessible only to that wealthy neighborhood.
• The project has a highly designed urban landscape that contrasts sharply with the brutal poverty in the rest of the city. The parks and amenities are on land already privatized to ensure that the investments, although made using public funds, benefit only the elite owners of the housing and office high-rise buildings nearby.
• A sophisticated system of cameras and security forces defines and controls access to the overprotected zone.
• All these mechanisms serve to ensure the overvaluation of the properties so that only upper social classes can afford to purchase them.

In the end, Puerto Madero is a clear demonstration of the regressive distribution of urban planning and public policy: a trouble-free ghetto for the rich.

Land Lines: As municipalities continue to compete for outside investments, is it possible to reconcile alternative objectives such as social and environmental priorities?

Eduardo Reese: The problem in our cities is not the lack of planning, but the current exclusionary pattern of planning policies. There cannot be one law for the formal city and exceptions for the rest. It is necessary to create a new urban and legal order in Latin America based on the right to the city, the equitable sharing of the benefits of urbanization, and the social function of land ownership.

Land Lines: How does the municipality of San Fernando in the Buenos Aires metropolitan area offers an alternative to this approach?

Eduardo Reese: San Fernando is located some 30 kilometers (km) north of Buenos Aires, with a land area of 23 square km and a population of 156,000 inhabitants. A 5 km long riverside faces the Río Luján and another part of the city faces the mouth of Río de la Plata, where productive nautical activities are concentrated. This privileged location has high property values and all urban services.

The plan and model of urban land management in the city began in 2003 through an agreement between the municipality and the Conurbano Institute. In 2005, a Lincoln Institute training seminar helped broaden the local debate on land management, which led to a series of major decisions:

• to generate sustainable resources to redirect urban development;
• to recover the culture of public works financed by a tax for improvements;
• to recover land for social housing, urban facilities, and road networks;
• to strengthen the city and municipal administration as innovative actors in implementing public policies; and
• to limit the overvaluation of land by intervening in the market through mechanisms such as new urban planning legislation, instruments to collect the surplus, and a large supply of land for the poor.

The urban policy focused on a set of action strategies including (1) ensuring accessibility to new public spaces for recreational, sports and commercial purposes on the riverside, especially for the use and enjoyment of the poor; and (2) the comprehensive regularization of the western sector of the municipality, where most poverty is concentrated.

To implement these strategies it was necessary to increase fiscal resources for public investment in two ways: appropriation of the profitability of land use or municipal land on the riverside through the creation of the Consortium San Fernando Marina Park Company (PNSFSA) and participation of the municipality in the surplus generated from municipal tax reform. (PNSFSA is a company created by the municipality of San Fernando to manage the riverside of the northwest sector of the city, defined as Marina Park.)

The experience of San Fernando is based on a set of management tools within an urban plan focused on the redistribution of income to build a more equitable city. Land is considered a key asset within a wider strategy of local development and, therefore, management relies on a broad mix of planning, administrative, economic, fiscal, and legal instruments aimed at strengthening the role of the public sector. The core axis of policies is the search for equity in the distribution of the costs and benefits of urbanization, within the challenging context of growing pressure on land throughout metropolitan Buenos Aires.

Land Lines: What could or should be changed in the educational system that trains urban planners and managers in Latin America?

Eduardo Reese: First, it is necessary to incorporate a greater understanding of the functioning of land markets in the present context of developing and shaping cities. Second, a more critical analysis is needed of adequate theoretical, methodological and technical instruments to undertake diagnosis and intervention in urban land issues. The 2004 course on Land Markets that I described earlier attempted to develop these kinds of materials to enable students to cover the different scales and dimensions of the problem.

Land Lines: What tensions exist between private and public interests in urban planning?

Eduardo Reese: This is a critical question because the whole history of urban land management has had a common thread: the rights of private ownership of land and the structure of ownership have always come into conflict with urban planning activity, which is a public responsibility. In that sense, there will always be tension between public and private interests in building the city.

In my view, urban projects in Latin America have the responsibility to contribute not only to the creation of new spaces for public use and enjoyment, employment generation and environmental sustainability, but also social inclusion, equity in the access to services and the redistribution of urban rents generated by the project. The four cases on Chile, Colombia, Brazil, and Argentina mentioned earlier show that these benefits are possible in many contexts.

However, instead many urban projects have been justified as necessary to attract investment and/or consumers and to ensure or reinforce the dynamic competitive advantages of the city. These undoubtedly positive goals are sometimes used as a mechanism to legitimize interventions that deepen the serious sociospatial segregation of cities. Such adverse effects of the market are not fatal to the city, but are the outcome of perverse political choices.

Jay Espy joined the Elmina B. Sewall Foundation as its first executive director in January 2008. Based in Brunswick, Maine, the foundation focuses on the environment, animal welfare, and human well-being, primarily in Maine.

For the prior two decades, Espy served as president of Maine Coast Heritage Trust, a statewide land conservation organization. During his tenure, the Trust accelerated its land protection efforts along Maine’s entire coast by conserving more than 125,000 acres and establishing the Maine Land Trust Network, which helps build capacity of local land trusts throughout Maine. He also led the Trust’s successful Campaign for the Coast, raising more than $100 million for conservation and doubling the amount of protected land on Maine’s coast and islands.

Espy received his A.B. from Bowdoin College and master’s degrees in business and environmental studies from Yale’s School of Management and its School of Forestry and Environmental Studies. He serves on the board of the Maine Philanthropy Center and the Canadian Land Trust Alliance. He is a former chair of the Land Trust Alliance, a national organization serving land trusts throughout the United States. In October 2010 he was named the Kingsbury Browne Fellow for 2010–2011 through a joint program of the Land Trust Alliance and the Lincoln Institute.

Land Lines: How did you first become involved in the field of land conservation?

Jay Espy: Early in my senior year at Bowdoin College a wonderful placement counselor pointed out that some real-world experience might be useful in helping me secure gainful employment. I landed an internship documenting seabirds in Maine’s Casco Bay as part of an oil spill contingency planning project. This experience kindled an intense passion for the Maine coast and set the stage for my professional career. Following a stint working for an environmental consulting firm, graduate study in business, forestry, and environmental science at Yale, and several more internships, I was thrilled to accept an entry-level job at Maine Coast Heritage Trust (MCHT) in Topsham. At the time MCHT was a small statewide land trust and a great “school of hard knocks” for an aspiring 20-something conservationist with virtually no credentials.

Land Lines: What are some of the most significant land conservation projects in which you have been involved?

Jay Espy: In the late 1980s a 12,000-acre parcel of coastal land in far Down East Maine near the Canadian border was put up for sale by a major corporation divesting all of its timberland holdings in the northeastern United States and Maritime Canada. This was the largest remaining undeveloped block of coastal land in Maine, and one of the largest anywhere on the eastern seaboard. MCHT had never before faced such an exciting or daunting challenge.

In partnership with the State of Maine, The Conservation Fund, and the Richard King Mellon Foundation, MCHT led an effort to acquire the property and to work with local and state officials on a plan to conserve the land while incorporating appropriate working forest management, recreational trail development, and affordable housing in the Town of Cutler. Although we didn’t know it at the time, we were doing “community conservation” by engaging a wide range of constituents with varying interests. This project also put MCHT in the business of landscape-scale conservation. Dozens of projects have since been completed in that region, known as Maine’s Bold Coast. More than 20 miles of breathtaking shoreline are now accessible to the public and provide economic opportunities for the community.

I feel privileged to have helped protect many other lands, both large and small. Marshall Island, a 1,000-acre gem 15 miles offshore from the Blue Hill peninsula, was once slated for major development, but now has an extensive coastal trail system developed by MCHT. Aldermere Farm in Camden and Rockport is an iconic saltwater farm. Albert Chatfield began raising Belted Galloway cattle here in the 1950s, and the farm has been home to an award-winning breeding herd ever since. Following donation of the property in 1999, MCHT has greatly expanded farm programs for local youth and the community in general and protected additional nearby lands that are being used to support the growing local food movement.

Land Lines: When did you become aware of the Lincoln Institute’s work in land conservation, and how have you been involved in our programs?

Jay Espy: The timing of my entry into the conservation field was most fortuitous. Within months of joining MCHT, I was invited to a gathering of conservation professionals at the Lincoln Institute, co-hosted by the Land Trust Alliance (then known as the Land Trust Exchange). I had previously met Kingsbury Browne very briefly at a conference in Washington, DC, but at that gathering I had the chance to spend a full day with him and some of the other revered leaders of the modern land conservation movement.

Over the course of many years, the Lincoln Institute became a “watering hole” for conservationists, many of them originally assembled by Kingsbury, and they became valued mentors to me as I learned the trade. The Institute has continued to be a place where creative minds gather to innovate and where cutting-edge research and communication for the broader conservation community are encouraged. I am honored to be part of that legacy as a Kingsbury Browne Fellow.

Land Lines: What do you see as future trends in land conservation?

Jay Espy: The conservation field is growing, changing, and maturing in what I believe is a very healthy way. Not long ago many of us in the field thought land conservation was all about the land. I well remember early land trust brochures full of pictures of beautiful landscapes, but entirely devoid of people. Fortunately, that’s no longer true.

Today, most of us in the movement understand that land conservation is about land and people. It’s about how our communities benefit from healthy ecosystems; how outdoor recreational opportunities close to home combat youth inactivity and obesity; how protected farmland contributes to food security and the availability of nutritious local food; how outdoor spaces incorporating local arts and entertainment contribute to vibrant downtowns; how clean water, forestland, and a host of other sustainably managed natural resources support economic development and jobs; and how well-managed land allows each of us individually and collectively to live richer, fuller lives.

All across the country, the silos that have separated the work of conservation, public health, arts, education, hunger, housing, food production, and economic development are coming down. I’m encouraged by this trend. Our work today will only stand the test of time if it has direct and tangible benefit to people over many decades. Collaborative engagement of those with wide and varied interests seems an essential ingredient in any successful recipe for enduring conservation.

Land Lines: How can the challenges of funding conservation become opportunities?

Jay Espy: We do face many challenges on the funding front. Public funding from traditional federal and state government sources has been declining, private foundations have seen the corpus of their endowments erode, and individual donors have been understandably more conservative with their philanthropic investments as the markets have seesawed. As a result, fewer of the mega-scale land deals requiring tens of millions of dollars that we saw in the late 1990s and early 2000s are being launched today.

That said, there is still a great deal of very important conservation work being funded around the country. Public support for local conservation remains high, with most local bond initiatives continuing to pass by wide margins. Foundation and individual giving for conservation has not tanked as many feared. Funders remain supportive, but have become more discerning. Also, conservation projects that address multiple human interests and engage multiple partners appear to be attracting new, nontraditional sources of support. I recently spoke with a health funder who views securing more land for public recreation as a critical preventative healthcare measure. Funding for farmland conservation has also grown substantially in recent years, fueled in part by the explosive popularity of the local food movement.

Land Lines: Can you share some examples of innovative land conservation successes?

Jay Espy: In a remote area of eastern Maine, the Downeast Lakes Land Trust has been working for more than a decade to protect large swaths of forestland with extensive shore frontage near the community of Grand Lake Stream. These lands and waters have supported the timber and recreation-based economy for more than a century. With the decline in the paper and pulp industry, several large commercial timber holdings have been sold.

Rather than simply wait for the inevitable development of seasonal vacation homes and resulting loss in local culture, the community has worked in remarkable ways to acquire tens of thousands of acres and miles of shore land for use as a revenue-generating forest, wildlife preserve, and remote recreational areas. Local business owners, fishing and hunting guides, representatives from state and federal agencies, members of the Passamaquoddy Indian Tribe, and elected officials from the local to the national levels have all joined forces with the land trust to acquire these properties and manage them for sustainable timber revenue, as well as for other traditional uses, including hunting, fishing, camping, and paddling.

In the central Maine town of Skowhegan, an enterprising young woman has acquired an old county jail, which she is converting into a grain mill. Once operational, the mill will process approximately 600 tons of grain annually, an amount requiring roughly 600 acres of farmland cultivated in grain crops. This area of Maine was once a thriving wheat-growing region, and is purported to have supplied the Union troops with a substantial portion of their bread during the Civil War. Located in the heart of town, the parking lot of the old jail already serves as the site of a successful local farmers market. A commercial kitchen and several food and crafts business are co-locating in the jail, helping to create a “food hub.”

Skowhegan is the county seat of one of the most impoverished counties in Maine. Could the food hub start to change the fortunes of this region? Could a growing demand for grain stem the tide of farmland loss and result in more farmland acres being conserved and cultivated? Signs suggest the answer is to both questions is “yes.” I think what’s happening in Skowhegan is a wonderful example of the new face of conservation. It’s not yet readily recognizable, but I suspect we’ll get to know this community-based approach better in the years ahead.

Land Lines: What are your expectations about the role of conservation in the current volatile economy?

Jay Espy: I’m quite optimistic because adversity has a way of bringing people together. With less, we’re learning how to work collectively to do more. As more people participate in conservation, develop relationships with and around land, and experience the positive impact those relationships bring to their lives, I’m convinced we will see even more widespread, meaningful, and durable conservation achievements. Land, people, and community are all deeply intertwined. Ironically, these trying times may be accelerating the inevitable transformation of conservation into an endeavor that benefits even more people and more aspects of community life.

Los suelos de fideicomisos estatales en el oeste intermontañoso de Estados Unidos podrían cumplir un papel importante en el creciente mercado de energía renovable. El Congreso concedió estos territorios, que cubren 14 millones de hectáreas, a los estados tras su incorporación a la Unión, con el fin de respaldar el sistema educativo y otras instituciones públicas. Los administradores de estos suelos de fideicomisos estatales tratan de encontrar maneras innovadoras y sostenibles de arrendar y vender parcelas para generar ingresos, y la energía renovable podría proporcionar una doble ventaja: suministrar energía limpia y sostenible, y al mismo tiempo generar un flujo de ingresos significativo para el beneficio público.

Los siete estados del oeste intermontañoso (Arizona, Idaho, Colorado, Montana, Nuevo México, Utah y Wyoming — ver figura 1) están usando los suelos de fideicomisos estatales para desarrollar energía renovable, con proyectos de energía eólica, solar, geotérmica y biomasa. Sin embargo, la industria no ha alcanzado todavía su pleno potencial. En 2011, la capacidad instalada de producción de energía renovable en fideicomisos estatales era de solo 360 megavatios, lo cual no es siquiera suficiente para alimentar el 2 por ciento de los hogares de la región. Los US$2 millones de ingresos generados por estas fuentes en suelos de fideicomisos estatales son menos del 1 por ciento de los más de US$1000 millones generados anualmente por otros medios (Berry 2013; WSLCA). La energía eólica es la que está experimentando la mayor actividad; todos los estados del oeste intermontañoso han arrendado suelos de fideicomisos estatales para proyectos eólicos, y todos cuentan con parques eólicos operativos. Si bien Arizona, Nuevo México y Utah han arrendado suelos de fideicomisos estatales para operaciones solares, hay solo una planta de generación en producción en el oeste intermontañoso, en Arizona. Sólo Utah tiene una planta geotérmica en suelos de fideicomisos estatales, y no hay ningún estado en la región que cuente con plantas activas de biomasa en suelos de fideicomisos estatales.

Este artículo se enfocará en tres tipos de energía renovable en tres estados distintos: un parque eólico en Montana, proyectos geotérmicos en Utah y generación de energía solar en Arizona, y en las condiciones, legislación y otros factores que han permitido su explotación exitosa. Estos tres ejemplos demuestran que dichos territorios tienen un potencial desaprovechado en su mayor parte para este mercado naciente de energía sostenible, proporcionan oportunidades de aprendizaje en todos los estados y ayudan a satisfacer la creciente demanda de energía renovable.

Parque eólico Judith Gap, Montana

Judith Gap es el único parque eólico operativo en suelos de fideicomisos en el estado de Montana, parcialmente ubicado también en suelos privados, en el centro-este del estado. Cuenta con 90 turbinas en total, cada una con una capacidad de generación de 1,5 megavatios; 13 de ellas están en suelos de fideicomisos estatales, en el borde delantero del parque eólico, con una capacidad total de 19,5 megavatios. El arancel por megavatio de aproximadamente 2,6 por ciento de los ingresos brutos produce alrededor de US$50.000 por año, según Mike Sullivan, del Departamento de Recursos Naturales y Conservación de Montana (DNRC). En el momento de su construcción, se cobró un único arancel por la instalación de US$20.000 (Rodman 2008).

Bob Quinn, el fundador de una compañía local de desarrollo eólico llamada Windpark Solutions, inició el proyecto en el año 2000, cuando le pro-puso la idea a un pequeño grupo que incluyó a representantes de la empresa de servicios públicos local, del Departamento de Calidad Medioambiental de Montana y del DNRC. Quinn dice que la colaboración cercana entre el emprendedor y el personal de estas entidades estatales fue la clave para ubicar con éxito el proyecto en suelos del fideicomiso estatal. El personal estatal también ayudó a Quinn a navegar por los trámites burocráticos, que incluyeron demoras imprevistas en el proceso de licitación requerido por el estado.

Después de realizar estudios preliminares —con un permiso de un año otorgado por medio de una licencia del uso del suelo del DNRC— los emprendedores deben presentar una solicitud ante el DNRC para proseguir con los proyectos de energía. El estado después hace una solicitud de propuestas. Los candidatos que tienen una licencia del uso del suelo no reciben tratamiento preferencial. Después de haber identificado a un candidato competente, éste tiene que realizar un estudio medioambiental, llegar a un acuerdo de compra de energía con una empresa de servicios públicos y determinar la factibilidad económica de su proyecto antes de firmar un contrato de arriendo con el DNRC. En la actualidad, los aranceles de licencias nuevas para el uso del suelo son generalmente de US$2 por acre (equivalente a 0,40 hectáreas) al año. Los costos de los acuerdos de arriendo para nuevos proyectos eólicos incluyen un arancel de instalación único de US$1.500 a US$2.500 por megavatio de capacidad instalada, y aranceles anuales del 3 por ciento de los ingresos brutos anuales o un mínimo de US$3.000 por cada megavatio de capacidad instalada (Rodman 2008, Billings Gazette 2010).

Estructura de arriendo y aranceles

Cada estado tiene un sistema de arriendo distinto para los proyectos de energía renovable en suelos de fideicomisos estatales, pero todos siguen un patrón similar. El proceso comienza en general con un arriendo de corto plazo para planificación, que permite la realización de estudios meteorológicos y de exploración. A continuación está la fase de construcción, seguida de un arriendo de largo plazo para la producción. Los pagos a la agencia que administra los suelos de fideicomisos estatales incluyen en general un monto por hectárea durante la etapa de planificación, que puede continuar durante la etapa de producción. Hay cargos adicionales por instalación de equipos, como torres meteorológicas, turbinas eólicas, colectores de luz solar, estructuras y alguna otra infraestructura. Durante la etapa de producción, el arancel se basa generalmente en la capacidad instalada o en los ingresos brutos de la planta de generación.

Desde que se completó el parque de Judith Gap en 2005, se han propuesto varios parques eólicos en suelos de fideicomisos estatales en Montana, pero ninguno de ellos ha alcanzado todavía la fase de producción. Entre éstos se incluye el proyecto de energía eólica de Springdale, un parque eólico de 80 megavatios compuesto por 44 turbinas, 8 de las cuales estarían en suelos de fideicomisos estatales. El DNRC también ha arrendado 1.200 hectáreas cerca de Martinsdale a Horizon Wind Energy para un parque eólico de 27 turbinas, de las cuales de 7 a 15 estarían en suelos de fideicomisos estatales. El parque eólico de Martinsdale podría ampliarse en el futuro a 100 turbinas (Montana DNRC).

Para que los suelos de fideicomisos estatales sean más atractivos para estos y otros emprendedores de energía renovable, el DNRC debería simplificar el proceso. Los emprendedores que han trabajado en los suelos de fideicomisos estatales en Montana han citado problemas de demoras, financiamiento, mitigación medioambiental, falta de cooperación de las empresas de servicios públicos y transmisión (Rodman 2008). Según Quinn, Judith Gap tuvo éxito en parte debido a la dedicación y colaboración cercana entre el personal estatal y el emprendedor de energía. En el futuro, el DNRC quizá tenga que asignar personal dedicado a proyectos de energía renovable para ayudar a los emprendedores con este proceso. El DNRC también podría atraer proyectos otorgando a los licenciatarios del uso del suelo un estado preferencial en el proceso de licitación y acelerando dicho proceso. Quinn señala que el sistema podría mejorar si se evaluaran las ofertas de acuerdo a la prestación, en vez de tener en cuenta solamente el precio.

Energía geotérmica, Utah

La energía geotérmica es una fuente potencial de energía constante, al compensar las fluctuaciones de las energías renovables intermitentes como la eólica o solar. No obstante, también es técnicamente compleja y cara — y por tanto inusual en los suelos de fideicomisos estatales del oeste intermontañoso. En la actualidad, Utah es el único estado de la región con plantas geotérmicas activas en suelos de fideicomisos estatales. Por superficie, la geotérmica es la mayor fuente de energía renovable en Utah, con aproximadamente 40.000 hectáreas situadas en suelos de fideicomisos estatales. En la actualidad hay dos plantas de energía geotérmica en producción que generan ingresos de entre US$200.000 y US$300.000 al año. Para los proyectos geotérmicos, la Administración de Suelos de fideicomisos estatales e Institucionales (SITLA), que administra los suelos de fideicomisos estatales en Utah, cobra un 2,25 por ciento de las ventas de electricidad durante los primeros 5 a 10 años y un 3,5 por ciento de ahí en adelante.

La planta de 34 megavatios de PacifiCorp en Blundell, en territorio de propiedad mixta privada, federal y estatal, fue la primera construida en el estado en 1984. Blundell explota una reserva subterránea que se encuentra a 1.000 metros de profundidad, a una temperatura de más de 260° C y una presión de 34 atmósferas (500 psi). Se perfora un pozo para que el agua caliente y de alta presión suba a la superficie e impulse una turbina de vapor. La planta de Blundell tiene dos unidades, una de 23 megavatios, construida en 1984, y otra de 11 megavatios, completada en 2007.

La planta más reciente de Raser en el condado de Beaver ha tenido menos éxito. Raser pensó instalar originalmente una planta de 15 megavatios usando una tecnología modular más moderna producida por United Technologies, dijo John Andrews, subdirector de SITLA. La empresa intentó reducir el costo y el tiempo de desarrollo explorando el recurso geotérmico al mismo tiempo que construía la planta de generación, en vez de perforar primero los pozos geotérmicos y después construir la planta. Desafortunadamente, el recurso geotérmico fue más escaso de lo previsto y no pudo soportar la potencia nominal de 15 megavatios. Con ingresos limitados, Raser no pudo cubrir sus deudas y se declaró en quiebra en 2011. La planta sigue funcionando con una capacidad limitada (Oberbeck 2009).

La experiencia de Raser demuestra que los costos del desarrollo geotérmico siguen siendo desa-lentadores, y que vale la pena analizar previamente en profundidad las características del recurso geotérmico disponible antes de construir las plantas de generación, si bien este paso adicional es costoso y demora tiempo. Los futuros avances tecnológicos pueden ayudar a reducir el costo y el tiempo necesario para el desarrollo geotérmico, pero dado el estado actual de la tecnología, los proyectos geotérmicos exigen todavía importantes inversiones iniciales.

SITLA es la entidad encargada de dar respuesta a los proyectos de desarrollo de energía renovable a medida que se reciben; también puede ofrecer suelos en arriendo mediante solicitud de ofertas o proceso de licitación en pliego cerrado (Rodman 2008). El estado ha hecho un mapa de zonas de energía renovable, pero la tarea de encontrar los lugares y proponer proyectos de energía renovable recae sobre los emprendedores.

Utah también enfrenta otras dificultades para todas las formas de desarrollo de energía renovable en suelos de fideicomisos. Debido a la alta proporción y el patrón de distribución de territorios federales, las agencias nacionales a veces son las que toman la iniciativa en proyectos de desarrollo de energía. Según Andrews, la ausencia de un estándar de cartera de energía renovable (Renewable Portfolio Standard, o RPS) en Utah es otra desventaja, porque las empresas locales de servicios públicos carecen de un mandato estatal para suministrar energía renovable.

Aun sin un RPS, sin embargo, Utah está bien situado geográficamente para exportar energía a otros estados, particularmente a los centros de población en la costa oeste. Aunque la transmisión de energía puede constituir un impedimento en algunas partes del estado, existe en la actualidad capacidad de transmisión entre Utah y el sur de California. Más aún, los emprendedores pueden aprovechar una serie de recursos renovables: eólico, solar y geotérmico. SITLA podría comercializar los suelos de fideicomiso en zonas de energía renovable a emprendedores potenciales, ofreciendo aranceles reducidos para proyectos en dichas zonas.

Desarrollos solares en Arizona

Incluso en Arizona, el estado más soleado de los EE.UU., según el Servicio Meteorológico Nacional, la industria solar enfrenta varios obstáculos en los suelos de fideicomisos estatales. La única planta solar activa en suelos de fideicomisos estatales, la planta solar de Foothills, se inauguró en 160 hectáreas del condado de Yuma en abril de 2013, con la puesta en marcha de 17 megavatios. 18 megavatios adicionales entrarán en operación en diciembre de 2013. Cuando se encuentre plenamente operativa, la planta dará servicio a 9.000 clientes. El contrato de arriendo de 35 años generará US$10 millones para los beneficiarios de los suelos de fideicomisos estatales, y la mayor parte de este dinero se destinará a la educación pública.

El desarrollo lento de la industria solar en de suelos de fideicomisos refleja una tendencia más amplia a nivel nacional. En 2010, sólo el 0,03 por ciento de la energía del país provino de proyectos solares, mientras que el 2,3 por ciento fue generado por el viento (www.eia.gov). Los proyectos solares en general exigen el uso exclusivo de un sitio, lo cual genera una desventaja más grande aún en los suelos de fideicomisos estatales, donde ya hay muchas otras hectáreas arrendadas para agricul-tura, pastoreo o producción de petróleo y gas. Los proyectos eólicos, en contraste, pueden coexistir con otros usos del suelo. Los proyectos solares también requieren mucha superficie, hasta 5 hectáreas por megavatio (Culp y Gibbons 2010), mientras que las plantas eólicas tienen una huella relativamente pequeña. Y, aun cuando los precios están cayendo, las plantas de generación solar pueden ser muy caras.

A pesar de estas desventajas, hay siempre maneras en que se puede adaptar el desarrollo solar a los suelos de fideicomisos estatales. Para empezar, estos territorios no pagan impuestos ni tienen deudas; como no tienen la misma carga financiera que los propietarios privados, las agencias que administran los suelos de fideicomisos tienen una ventaja para ubicar y mantener proyectos de energía renovable. Algunos emprendedores solares encuentran atractivos los suelos de fideicomisos estatales porque permiten la utilización de grandes superficies por parte de un solo propietario. La generación solar también se adapta bien a sitios que sufrieron perturbaciones previamente, como viejos rellenos sanitarios y áreas agrícolas abandonadas, que pueden incluir los suelos de fideicomisos. Cerca de las zonas urbanas, los suelos de fideicomisos estatales que están en reserva para emprendimientos futuros se podrían usar en el ínterin para generación solar; cuando los contratos de arriendo venzan, el suelo se podría usar para emprendimientos urbanos (Culp y Gibbons 2010).

Un estándar de energía renovable estatal e incentivos tributarios también podrían alentar el desarrollo solar. Algunos estados ofrecen créditos tributarios de hasta el 25 por ciento para inversiones, exenciones del impuesto sobre la propiedad, y contratos de compra con términos estándar para energía solar, garantizando un mercado a largo plazo para la generación solar.

El Departamento de Suelos Estatales de Arizona (ASLD), uno de los terratenientes más grandes del estado, con varias parcelas consolidadas de gran tamaño, se podría posicionar como socio atractivo para la industria de energía renovable (Wadsack 2009). El ASLD está dando pasos en la dirección correcta, desarrollando un sistema de mapas de energía renovable con SIG a fin de analizar la adecuación general de los suelos de fideicomisos estatales de energía renovable para la producción solar, evitando al mismo tiempo las áreas de hábitat de vida silvestre y de preservación del desierto, y reduciendo la distancia a caminos, líneas de transmisión y centros de demanda. Pero tiene que seguir avanzando y comercializar las áreas más adecuadas para energía renovable (Culp y Gibbons 2010) y facilitar el proceso a los emprendedores, que pueden desalentarse a causa de las complejas estructuras de arriendo, los requisitos de subasta pública y las exigencias de análisis medioambiental y cultural (Wadsack 2009). Cuanta más capacidad pueda construir el Departamento para ayudar a los emprendedores en este proceso, más podría florecer la industria de energía renovable en los suelos de fideicomisos estatales. Por ejemplo, el departamento podría ofrecer contratos de arriendo de largo plazo, acelerar la venta de suelos y desarrollar un sistema de arriendo de costo reducido con participación en los ingresos, diseñado específicamente para el desarrollo de energía renovable.

Recomendaciones generales para Montana, Utah y Arizona

El arriendo para energía renovable en los suelos de fideicomisos estatales es complicado. Cada estado posee un conjunto singular de circunstancias políticas, medioambientales y económicas que hace difícil establecer un método óptimo para todos. No obstante, los logros, problemas y soluciones detalladas en los ejemplos anteriores brindan algunas recomendaciones generales para alcanzar el éxito.

A nivel de la agencia que administra el fideicomiso de suelos estatales:

• Comercializar en forma activa los sitios adecuados a los emprendedores. En algunos estados, como Arizona y Utah, las agencias de administración de los suelos de fideicomisos estatales están creando inventarios de las áreas más adecuadas para el desarrollo de energía renovable en suelos estatales. Otros estados podrían seguir este modelo (BLM 2011, Berry et al 2009), comercializar estas parcelas y ofrecer incentivos para el desarrollo, ya sea como parte del pro-ceso de arriendo o por medio de incentivos tributarios (Culp y Gibbons 2010).
• Reducir el riesgo a los emprendedores otorgándoles derechos exclusivos en la etapa temprana de descubrimiento o dando prioridad a aquellos que han efectuado la evaluación inicial del sitio en el proceso de licitación o subasta.
• Fomentar la colaboración cercana entre el emprendedor y los administradores de suelos de fideicomisos, educando al personal en temas de energía renovable para guiar a los emprendedores en el proceso de otorgamiento de permisos, financiamiento y colaboración con las agencias federales.
• Derribar silos y colaborar con otros propietarios y agencias de administración de suelos para acelerar el proceso de otorgamiento de permisos y mejorar la coordinación entre las diversas agencias a nivel local, estatal y federal.

A nivel estatal:

• Agilizar los requisitos medioambientales. La Ley Nacional de Política Medioambiental (NEPA) exige un análisis pormenorizado de impacto medioambiental para proyectos que se desarrollan en suelos federales. Montana y otros estados requieren análisis adicionales y separados para desarrollos en los suelos estatales, mientras que otros estados agilizan los requisitos permitiendo que los análisis de NEPA se usen para cumplir también con las obliga-ciones estatales en proyectos que abarcan tanto jurisdicciones federales como estatales. Esta estrategia agilizada puede ser más atractiva para los emprendedores de energía, sin dejar de proteger en forma efectiva los recursos medioambientales.
• Adoptar o aumentar los estándares de cartera de energía renovable (RPS). En el oeste intermontañoso, Arizona, Colorado, Montana y Nuevo México han instituido políticas de RPS, mientras que Utah sólo tiene un objetivo de energía renovable. Los administradores de suelos de fideicomisos en Utah y Idaho citaron la falta de estándares de carteras de energía renovable como un impedimento para la industria de energía renovable en sus estados. A lo largo de la región las metas de RPS varían del 15 al 30 por ciento de energía renovable. Los estados con metas más bajas podrían considerar la posibilidad de adoptar políticas de RPS más efectivas para fomentar el desarrollo de la energía renovable.
• Ofrecer políticas tributarias que estimulen el desarrollo renovable, incluyendo incentivos al pago de impuestos sobre la propiedad, in-centivos en el impuesto a las ventas o créditos tributarios. Cada estado podría adoptar ya sea políticas adicionales de incentivo tributario o aumentar los incentivos existentes para fomentar más aún el desarrollo de energía renovable.

Las políticas federales cumplen también un papel importante. En particular, los créditos tributarios a la producción han estimulado el desarrollo de energía renovable en las últimas décadas. Del mismo modo los créditos tributarios federales a la inversión en energía renovable, que proporcionan a los emprendedores un crédito tributario durante las fases de planificación y construcción, han ayudado al crecimiento de la industria de energía renovable en los últimos, aun cuando la economía nacional estaba en recesión. Finalmente, se han presentado varias propuestas para un estándar federal de cartera de energía renovable, si bien los investigadores no se ponen de acuerdo sobre si este tipo de política podría interferir con las políticas de RPS a nivel estatal, que han demostrado ser extremadamente efectivas.

La energía renovable ofrece a los administra-dores de suelos de fideicomisos estatales una oportunidad para diversificar sus ingresos y beneficiar el bien común. En su mayoría, los proyectos eólicos y de transmisión se pueden ubicar en terrenos que ya se han arrendado para pastoreo, agricultura, petróleo y gas. Los proyectos solares podrían tener su mayor potencial en áreas previamente alteradas o en zonas con escaso valor alternativo. Donde haya recursos geotérmicos disponibles, se podrá generar energía en forma constante para compensar las fuentes de energía intermitentes, como el viento y el sol. Los avances técnicos podrían ayudar a reducir los precios de la energía renovable, sobre todo la energía solar, geotérmica y de biomasa. A medida que nuestras demandas de energía van creciendo, los suelos de fideicomisos estatales están en condiciones de desempeñar un papel importante en el crecimiento de la industria de energía renovable.

Este artículo fue adaptado del documento de trabajo del Instituto Lincoln “Leasing Renewable Energy on State Trust Lands” (Arriendo de energía renovable en suelos de fideicomisos estatales), disponible en línea en: www.lincolninst.edu/pubs/dl/2192_1518_Berry_WP12AB1.pdf.

Sobre el autor

Alison Berry es la especialista de energía y economía en el Sonoran Institute, donde su trabajo se concentra en temas del uso del suelo en el cambiante Oeste de los EE.UU. Tiene una licenciatura en Biología por la Universidad de Vermont y una maestría en Silvicultura por la Universidad de Montana. Sus artículos han sido publicados en el Wall Street Journal, el Journal of Forestry, y el Western Journal of Applied Forestry, entre otras publicaciones. Contacto: aberry@sonoraninstitute.org.

Recursos

Berry, Jason, David Hurlbut, Richard Simon, Joseph Moore y Robert Blackett. 2009. Utah Renewable Energy Zones Task Force Phase I Report. http://www.energy.utah.gov/renewable_energy/docs/mp-09-1low.pdf.

Billings Gazette. 2010. Wind farm developers eye school trust land. April 22. http://billingsgazette.com/news/state-and-regional/montana/article_14bfb038-4e0a-11df-bc99-001cc4c002e0.html.

Bureau of Land Management. 2011. Restoration Design Energy Project. http://www.blm.gov/az/st/en/prog/energy/arra_solar.html.

Culp, Peter y Jocelyn Gibbons. 2010. Strategies for Renewable Energy Projects on Arizona’s State Trust Lands. Lincoln Institute of Land Policy Working Paper WP11PC2. https://www.lincolninst.edu/pubs/dl/1984_1306_CulpGibbon%20Final.pdf.

Montana Department of Natural Resources. 2011. Montana’s Trust Lands. Presented at the Western States Land Commissioners Association annual meeting. Online: http://www.glo.texas.gov/wslca/pdf/state-reports-2011/wslca-presentation-mt-2011.pdf accessed November 23, 2011.

Oberbeck, Steven. 2009. Utah geothermal plant runs into cold-water problems. Salt Lake Tribune. September 17. And Bathon, Michael. 2011. Utah’s Raser Technologies files Chapter 11. Salt Lake Tribune. May 2.

Rodman, Nancy Welch. 2008. Wind, wave/tidal, and in-river flow energy: A review of the decision framework of state land management agencies. Prepared for the Western States Land Commissioners Association. http://www.glo.texas.gov/wslca/pdf/wind_wave_tidal_river.pdf.

Wadsack, Karin. 2009 Arizona Wind Development Status Report. Arizona Corporation Commission.

It is difficult to overstate how ongoing population loss has devastated Detroit. Between 1900 and 1950, when the rise of U.S. automobile manufacturing made the city one of America’s premier industrial and cultural centers, the population spiked from 300,000 to 1.85 million. Beginning in 1950, however, it began to fall. And its decline has been continuous to the present day, plummeting to just 700,000 in 2010, at a rate of descent nearly as swift as the rate of ascent in the first half of the 20th century.

Despite Detroit’s decades-long effort to keep pace with population loss by removing dilapidated housing stock, roughly a quarter of its 380,000 parcels are now abandoned, managed by the city or other public entities. As of July 2014, 114,000 properties have been razed, and 80,000 more are considered blighted (Austen 2014).

While the downtown is recovering and the suburbs remain vital, the “unfathomable dissolution of [the] built landscape” in vast areas of the city may shock the unsuspecting visitor (Austen 2014).

The first installment in a two-part series, this article considers the fiscal causes and repercussions of Detroit’s surplus of housing and vacant property: from the extent and location of abandoned homes and lots throughout Detroit to the downward spiral of house price declines leading to overassessment, property tax delinquency, and foreclosures; the public acquisition of that property; the pattern of land values across the city; and, finally, some potential ways to reconcile the remaining number of people with the amount of vacant and publicly held property. These measures range from targeting densely populated neighborhoods for redevelopment to establishing a greenbelt and reclaiming vacant parcels for public use as parks, forests, industrial buffers, retention ponds, and other open space (Austen 2014).

Factors Behind the Fall

The reasons for Detroit’s demise are numerous and perhaps too familiar. Federally subsidized transportation infrastructure, such as the Interstate highway system, facilitated rapid suburbanization, which was further enabled by permissive development codes. Racial tension, global economic forces, and corruption corroded what remained of the city proper. In the early stages of the malaise, higher-income residents, most of them Caucasian, left for the suburbs in search of a better quality of life, as shown in table1. By 1990, the African-American population had peaked as well and began to drop in the first decade of the 21st century. Beginning in the 1960s, Michigan auto manufacturing began its long, precipitous decline, disproportionately impacting Detroit and Flint. The loss of well-paying middle-class jobs further harmed the urban demographic and economic base, as households sought new employment opportunities elsewhere. Rising crime rates and continued erosion of public services induced another wave of exits.

Table 1 illustrates this downturn in the city’s demographic and economic conditions from 1950 through 2010. By 2012, according to government sources, median household income was just $25,000, less than half of the national median income. Poverty and unemployment rates were 38 and 27.5 percent, respectively. The labor force participation rate was 54 percent (compared to 63 percent nationwide), and for every 6.35 employed workers, there was one person receiving Social Security Disability benefits (compared to 1 of 12 nationwide). More than 34 percent of the city’s population received food stamps, and 81 percent of children in the Detroit Public Schools qualified for the Free and Reduced Lunch Program. Revenue streams became increasingly dependent on external sources, including nonresidents, as discussed in box 1. In 2013, when the city finally succumbed to the weight of accumulating fiscal challenges and declared bankruptcy, its debt and unfunded liabilities amounted to $18 billion—or $68,000 per household, which is about 2.7 times the median household income (Turbeville 2013).

The Failed Housing Market

The enormous excess supply of housing that accumulated over decades as a result of winnowing demand in Detroit corroded the value of that property. The real estate crisis of 2007–2008 dealt the final blow, resulting in the near-complete breakdown of Detroit’s housing market. By 2010, the average price of a residential property had plummeted to about $7,000 from $57,000 in 2006 (Hodge et al. 2014a). Detroit’s current excess of land and housing would likely suppress real estate price recovery in the coming years even if the population were to stabilize.

Property Tax Delinquency, Abandonment, and Public Acquisition of Property

Tax officials have not recalibrated assessment values to reflect house price declines. The resulting overassessment is as high as 80 percent (Hodge et al. 2014a), contributing to a general unwillingness to pay taxes, according to Alm et al. (2014). Their research also shows that additional factors such as high statutory tax rates and limited services such as public safety worsen this delinquency as well.

In the midst of the real estate crisis, property tax delinquency reached an alarming 50 percent (Alm et al. 2014). Figure 2 (p. 13) shows delinquency rates by neighborhood across the city in 2010. Property tax collection depends on a jurisdiction’s ability to impose sanctions for nonpayment of taxes, as noted by Langsdorf (1973). When real estate values collapse, taxing authorities have no workable enforcement mechanism; homeowners’ savings from nonpayment of property tax are greater than the value of the house they own and would lose in the instance of foreclosure. Further, proceeds from the sale of low-valued tax-foreclosed property are insufficient to cover back taxes owed and the government costs of initiating foreclosure proceedings.

Widespread failure to pay property taxes and the subsequent abandonment of homes has resulted in the public acquisition of thousands of properties throughout Detroit. Fifteen percent of the parcels within the 139-square-mile city are now empty, and nearly 25 percent of Detroit’s land area is now nontaxable, owned and managed by the city or some other public entity (Sands and Skidmore 2014), as illustrated in figure 3.

The Downward Spiral of Foreclosures

Currently, the number of properties flowing into public hands via tax foreclosure far outpaces the number of publicly held properties being purchased back by private taxpaying owners.

In Michigan, delinquent property taxes are subject to a 4 percent administration fee and 1 percent monthly interest on the delinquent amount computed at a non-compounded rate, beginning in the first month of nonpayment. After one year of delinquency, the city forfeits the property to county government, and the owner becomes subject to an additional 0.5 percent monthly interest charge. During this two-year period, owners may redeem their properties by paying all outstanding taxes and fees.

If property taxes go unpaid for more than two years, the Wayne County Treasurer initiates foreclosure proceedings. After a show cause hearing in the Circuit Court, the County Treasurer publicly auctions the foreclosed parcels. The starting bid equals the unpaid property taxes plus interest and penalties, and the proceeds are distributed proportionately to the taxing jurisdictions. If the property doesn’t sell at the first auction, the county lowers the minimum bid to $500 and holds a second auction. This procedure has led to further tax evasion, as some homeowners elect to ignore their tax bills with the expectation that they will be able to repurchase the parcel for $500 at the second auction.

Property that doesn’t sell at either auction may be transferred to a public body (city or state) or to a state or local land bank, or it may be held for a subsequent auction. County records indicate that 80 percent of the parcels sold to private buyers at auction over the past two years are once again delinquent on taxes (MacDonald 2013). Given that the tax delinquency rate is 67 percent for non-homestead property owners (Alm et al. 2014), it seems likely that a significant proportion of buyers at auction are absentee landlords who intend to reduce their operating expenses and increase their net rental income by never paying property taxes.

Property taxes are effectively optional on low-valued parcels as well. To minimize the backlog of tax-delinquent lots (MacDonald 2013), the county does not foreclose on homeowners who owe less than $1,600 in taxes and penalties in aggregate, effectively rendering these debts optional.

Expected revenue from the sale of low-valued parcels is insufficient to cover legal expenses associated with tax foreclosure and unpaid property tax balances. The end result is an increasing rate of delinquency and a growing inventory of unwanted property that ends up in the public sector, where it generates no revenue for the city.

Where to Go from Here?

Another wave of property tax-related foreclosures is expected in late 2014 and early 2015. What can be done to stabilize the situation?

Curbing Property Tax Delinquency

As mentioned, delinquency will abate when tax payers perceive that they receive commensurate returns for their money. Thus, improving the tax-service package by upgrading core services such as public safety will reduce evasion and lateness (Alm et al. 2014). Under the leadership of recently elected Mayor Mike Duggan, city government is taking steps to improve basic public service provision and put its fiscal house in order. For example, just 35,000 of 88,000 streetlights currently work, so Duggan plans to install 2,400 functioning streetlights per month (Austen 2014). He also increased the number of operating buses from 143 to 190, and improved snow plowing during the particularly harsh winter.

Lowering tax rates would modestly reduce delinquency as well (Alm et al. 2014). Roughly double the regional average, Detroit tax rates are at the state’s maximum of 67 mills and 85 mills per assessed value for homestead and non-homestead properties, respectively. While a reduction would improve the competitive position of the city relative to other communities in the region, currently there is no discussion of reducing property tax rates.

Aligning assessed values more closely with actual market conditions will also reduce delinquency. Mayor Duggan recently promised to lower assessments by 5 to 20 percent across the city to reconcile them with state guidelines. However, Duggan’s promised reductions are just a small fraction of the 80 percent cut needed to bring assesment to market levels, according to Hodge et al. (2014a).

Removing Land from the Market

In the absence of robust demand for land, which seems unlikely in the near future, the excess must be removed from the market for a period of time in order for real estate value to improve broadly across the city. Given that public entities now hold so much property, it is within the power of government authorities to credibly remove it from the market. Without this type of policy action, the possibility that these parcels could be quickly transferred to the private sector serves to hamper price recovery.

Currently, public lands are held by many public entities. Authorities from the City of Detroit, Wayne County, and state government are working to consolidate these parcels under a single entity that can manage them more effectively. Detroit Future City (2010) details the extent of the fragmented ownership of public lands:

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Public land in Detroit is held by many separate agencies, including city, county, and state agencies, as well as autonomous or quasi-governmental entities such as the Detroit Public Schools, the Detroit Housing Commission, and the Detroit Economic Growth Corporation. Few other cities have such fragmented holding of their public land inventory. There is no consistency of policy, procedure, or mission among these agencies, while many are hamstrung by burdensome legal requirements and complex procedures. The Department of Planning and Development controls the largest number of properties, yet its ability to do strategic disposition is constrained by procedural obstacles, including the need to obtain City Council approval for all transactions, however small and insignificant from a citywide perspective.

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While this consolidation process is necessary, it is not sufficient. Financial resources are required to remove blight and implement land use plans. City leaders are focused mainly on strategies to return these parcels to private ownership. If they can stimulate greater interest in Detroit property, this approach might be viable.

Indeed, opportunities for private ownership are emerging in the central business district (CBD). Daniel Gilbert, founder of Quicken Loans, has moved his headquarters to downtown Detroit and invested $1.3 billion in city real estate (Forbes 2014). And downtown renewal has led to substantial rental price increases (Christie 2014).

Land values are very high in the CBD, as depicted in figure 4 (p. 16) by the black parcels, which represent the very highest land values on the map. Detroit’s land value gradient is very steep, however. While several areas within the donut around the CBD have retained some worth, land values plunge rapidly as distance from the CBD increases, though they rise again near the city’s border, probably because amenities such as shopping are available in the nearby suburbs.

Given the weak demand outside the CBD, it may be more effective to determine which publicly held properties should return to private taxpaying parties, which properties should be taken off the market for a decade or two, with the option of returning land to the market should conditions change, and which should be permanently removed from the market.

The 2012 master plan, as outlined by Detroit Future City, calls for the reclamation of land for parks, forests, industrial buffers, greenways, retention ponds, community gardens, and even campgrounds (Austen 2014). Full implementation of this ambitious proposal requires significant financial resources. But consider how state and federal authorities intervened in the last major episode of mass tax foreclosure. During the Great Depression, many homesteaders on marginal agricultural lands in Michigan, Minnesota, and Wisconsin were unable to pay their property taxes, and this default resulted in a mass wave of tax delinquency, foreclosure, abandonment, and eventual forfeiture. In these states, county governments frequently became the owners of thousands of acres, much of which was eventually sold to the state and federal governments. The six national forests in Minnesota, Wisconsin, and Michigan, as well as the region’s numerous state forests, all have origins in this mass land abandonment of the Depression Era, as state and federal authorities pieced together a patchwork of adjacent lands purchased from counties eager to sell off their tax-forfeited property.

Today, state and federal authorities have no taste for a Detroit “bailout.” But history suggests that state and federal governments could help Detroit regain fiscal viability by purchasing patchworks of unwanted parcels, making payments in lieu of taxes, as is typical for other publicly owned lands, and then using the land for the benefit of the general public. Potential uses are mapped out in the aforementioned city master plan which the second installment of this series will explore. A federal, state, and local government partnership to reclaim these properties could help stabilize the land market and generate a revenue stream for the city and the other overlying taxing jurisdictions (including the state government via the state education tax). Property value recovery in combination with downtown reinvestment, continued efforts to improve Detroit’s tax-service package and remove blight, and long-run investment in Detroit’s human and social capital are essential elements of a sustainable Detroit recovery.

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Box 1: Targeting Nonresidents for Revenue

Detroit’s revenue streams have become increasingly dependent on external sources, including nonresidents, as its population and economic base have declined. This shift occurred in part because over time Michigan state legislatures empowered the City of Detroit to use tax-exporting strategies to help shore up weakening fiscal conditions and deal with massive structural changes to the regional economy. While there were periods during which it appeared that Detroit was on the cusp of recovery, various forces prevented “escape velocity.”

Today, the City of Detroit relies on the income tax, property tax, casino wagering tax, state revenue sharing, a utility user’s tax, federal grants, and various fees and licenses to fund public services. Of these, the casino wagering tax and the city income tax were adopted to bolster fading revenues from more traditional sources.

The casino wagering tax, based on gamers’ winning receipts, has become particularly important to the City of Detroit over the last decade, as shown in figure 2, which summarizes trends in the city’s major revenue sources from 1960 through 2012. The state legislature authorized casino gaming activity and the wagering tax in Detroit in 1996, to help the city address its fiscal challenges. By 2001, casino construction had been completed. The $180 million in additional annual revenues helped to stave off financial pressures even as other sources, such as income taxes and state shared revenues, were in decline. Up to 85 percent of gamers at the three major Detroit casinos are nonresidents, according to recent reports and interviews with gaming experts (Miklojcik 2014).

Since 1963, the city income tax has represented Detroit’s largest and, for a number of years, fastest-growing revenue source. At the time of adoption, the majority of the income tax was paid by city residents. As Detroit’s population has declined, however, the income tax on nonresidents who work in the city has become an increasing share of the city income tax base, composed of wages and salaries earned at a city-based job. The tax rate is 2.4 percent for city residents, whereas nonresidents pay 1.2 percent. While corporations and partnerships also pay an income tax, it is a very small portion of total revenues collected. According to Scorsone and Skidmore (2014), about half of the city income tax revenue in Detroit is paid by nonresidents.

State revenue sharing continues to play a critical role in Detroit’s finances, though population loss has diminished even this income source. In Michigan, state government collects a statewide sales tax and then shares a portion of the proceeds with municipal governments. Sales tax revenues are allocated to local governments based on constitutional provisions as well as state statute. The constitutional portion of revenue sharing is based on each jurisdiction’s share of the total state population. Given the dwindling number of Detroit residents, this portion of state revenue sharing has been falling for decades. The city experienced significant growth in total revenue sharing funds through the 1970s and 1980s, due to increases in statutory revenue sharing, which is distributed by formulae that have been changed by legislators many times in recent decades. But new changes to the statute combined with stagnation in the sales tax led to declining growth and eventual decline in revenue sharing for cities across the entire state in the 1990s. As Michigan entered a decade-long recession, this decline continued for most local jurisdictions, including Detroit, through the 2000s.

Some have pointed to revenue sharing reductions as a major source of stress for the City of Detroit, and a major catalyst for the bankruptcy. However, these declines affected all cities that received revenue sharing in Michigan; while cuts to revenue sharing likely influenced the timing of Detroit’s bankruptcy, they were not the ultimate cause. Further, it is important to note that revenue sharing for Detroit represents a net positive transfer of funds from the rest of the state to the city. According to the 2007 economic census, retail sales in the City of Detroit were $3.2 billion, or about 2.9 percent of the $109 billion in the State of Michigan.

In 2012, total state revenue sharing to all municipalities in Michigan was about $1 billion, and Detroit’s share of the total was $172 million, or 17.2 percent. Given that Detroit represents just 3 percent of total state retail sales in Michigan, one can conclude that the majority of state revenue sharing that flowed to Detroit originated from retail transactions that occurred outside the city.

As of 2014, the City of Detroit had approximately a $1 billion General Fund, considerably lower than in 2002 when revenue peaked at $1.4 billion. A 30 percent drop in revenues over time without a commensurate cut in expenditures led to the Detroit fiscal crisis and the eventual declaration of bankruptcy in 2013. By 2012, Detroit had borrowed more than $1 billion in an attempt to stave off default and a liquidity crisis (Michigan Department of Treasury 2013).

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About the Author

Mark Skidmore is professor of economics at Michigan State University, where he holds the Morris Chair in State and Local Government Finance and Policy, with joint appointments in the Department of Agricultural, Food and Resource Economics and the Department of Economics.

References

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Austen, B. 2014. “The Post-Apocalyptic Detroit.” New York Times, July 13. http://nyti.ms/1mFu3Jn

Center for Educational Performance and Information. Accessed in July 2014 from www.michigan.gov/cepi/0,4546,7-113-21423_30451—,00.html

City of Detroit. 2013. Comprehensive Annual Financial Report. www.detroitmi.gov/Portals/0/docs/finance/CAFR/Final%202012%20Detroit%20Financial%20Statements.pdf

Christie, Les. 2014. “I’ve Been Priced Out of Downtown Detroit.” CNN Money, May 27. http://money.cnn.com/2014/05/27/real_estate/downtown-detroit/index.html

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Forbes. 2014. “World’s Billionaires.” www.forbes.com/profile/daniel-gilbert

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Hodge, T., G. Sands, and M. Skidmore. 2014b. “The Land Value Gradient in a (Nearly) Collapsed Urban Real Estate Market.” Lincoln Institute of Land Policy Working Paper.

Landsdorf, K. 1973. “Urban Decay, Property Tax Delinquency: A Solution in St. Louis.” The Urban Lawyer 5: 729–748.

MacDonald, C. 2013. “Half of Detroit Property Owners Don’t Pay Taxes.” The Detroit News, February 12.

Michigan Department of Treasury. 2013. Supplemental Documentation of the Detroit Financial Review Team. www.michigan.gov/documents/treasury/Review_Team_Report_Supplemental_2–19-13_411866_7.pdf

Michigan Department of Treasury. 2010. Real Property Tax Forfeiture and Foreclosure. www.michigan.gov/taxes/0,4676,7-238-43535_55601—,00.html

Miklojcik, J. 2014. President of Michigan Consultants. Information shared in personal interview with Eric Scorsone.

National Public Radio. 2014. “Chinese Investors Aren’t Snatching up Detroit Property Yet.” www.npr.org/2014/03/04/285711091/chinese-investors-arent-snatching-up-detroit-property-yet

Sands, G. and M. Skidmore. 2014. “Making Ends Meet: Options for Property Tax Reform in Detroit.” Forthcoming in Journal of Urban Affairs.

Scorsone, E. and M. Skidmore. 2014. “Blamed for Incompetence and Lack of Foresight and Left to Die.” Response to William Tabb’s “If Detroit Is Dead Some Things Need to Be Said at the Funeral.” Forthcoming in Journal of Urban Affairs.

Turbeville, W. 2013. “The Detroit Bankruptcy.” Demos, November 20. www.demos.org/publication/detroit-bankruptcy