DOI: https://doi.org/10.14710/ijpd.9.1.1-14

Land Value Capture for Sustainable Urban Development in A Developing City: A Case of Bekasi City, Indonesia

*Aang Anggara orcid  -  1. Spatial Planning Office, Government of Bekasi Municipality, Jl Jenderal Ahmad Yani No. 1, Bekasi, Indonesia
Nurrohman Wijaya  -  2. School of Architecture, Planning, and Policy Development (SAPPD), Bandung Institute of Technology, Gedung Labtek IX-A Sugijanto Soegijoko Lantai II, Jl. Ganesha No. 10 Kota Bandung Kode Pos 40123, Indonesia, Indonesia
Received: 13 Dec 2023; Published: 29 Oct 2024.
Editor(s): Prihadi Nugroho
Open Access Copyright (c) 2024 The Indonesian Journal of Planning and Development
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Citation Format:
Abstract

Developing a city into a sustainable initiative will take much work, especially given the urban governments with limited budgets and knowledge. These situations are significant in the Global South countries, particularly in emerging economies like Indonesia. One potential urban finance is land value capture (LVC). This paper aims to investigate the concept of LVC as land-based financing for sustainable urban development and examine which instruments are suitable and appropriate to be implemented in an emerging metropolitan city, Bekasi City, Indonesia. The city was selected due to its high urbanization rate, population growth, and facing urban financial challenges. We adopted a systematic review in the initial study to find the LVC development concept. This study used three literature databases: Scopus, Google Scholar, and Science Direct, and we found 20 relevant documents. It reveals several discussed themes regarding LVC, such as the adoption of LVC instruments, the role of LVC regulation, and its governance. This study also examines some instruments of LVC that are suitable for implementation in Bekasi City, such as selling air rights based on floor area ratio (FAR), betterment levy, and developer exaction. LVC can be an innovative urban financing instrument for sustainable urban development by capturing the improvement in land value initiated by government or private investments in urban infrastructure, transportation, or other public goods.

Note: This article has supplementary file(s).

Fulltext View|Download |  Research Instrument
Untitled
Subject
Type Research Instrument
  Download (863KB)    Indexing metadata
Keywords: land value capture; sustainable urban development; urban finance; systematic review; Bekasi City

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
Exploring Level of Effectivity on Public Transportation as One of Transportation Demand Management Strategy Visualization and Mapping of Research Topics Transportation Model Sustainable Movement for Livestock Folding Container Ship as Sea Toll Supports Morphology of Ranai City Natuna as the small island border city and sustainable development input More recent articles
  1. ADB. (2021). Innovative Infrastructure Financing Through Value Capture in Indonesia
  2. Ahvenniemi, H., Huovila, A., Pinto-Seppä, I., & Airaksinen, M. (2017). What Are the Differences Between Sustainable and Smart Cities? Cities, 60, 234–245. https://doi.org/10.1016/j.cities.2016.09.009
  3. Andrés G. Blanco B., Moreno, N., Vetter, D. M., & Vetter, M. F. (2017). The Potential of Land Value Capture
  4. Angelidou, M., Psaltoglou, A., Komninos, N., Kakderi, C., Tsarchopoulos, P., & Panori, A. (2018). Enhancing Sustainable Urban Development Through Smart City Aplications. Journal of Science and Technology Policy Management, 9(2), 146–169. https://doi.org/10.1108/JSTPM-05-2017-0016
  5. Biderman, C. (2021). Value Capture and the Role of Land in the Equality of Opportunities: The Case of São Paulo, Brazil. Lincoln Institute of Land Policy, (2021). Retrieved from https://about.jstor.org/terms
  6. Blanck, M., & Ribeiro, J. L. D. (2021). Smart Cities Financing System: An Empirical Modelling from the European Context. Cities, 116(June). https://doi.org/10.1016/j.cities.2021.103268
  7. Borrero Ochoa, O. (2011). Betterment Levy in Colombia. Land Lines, 14–19
  8. BPS Kota Bekasi. (2023). Kota Bekasi Dalam Angka 2023. BPS Kota Bekasi, 346
  9. Canelas, P., & Noring, L. (2022a). Governmentalities of Land Value Capture in Urban Redevelopment. Land Use Policy, 122(November 2021), 106396. https://doi.org/10.1016/j.landusepol.2022.106396
  10. Canelas, P., & Noring, L. (2022b). Governmentalities of Land Value Capture in Urban Redevelopment. Land Use Policy, 122(September), 106396. https://doi.org/10.1016/j.landusepol.2022.106396
  11. Chi-Man Hui, E., Sze-Mun, V., & Kim-Hin, D. (2004). Land Value Capture Mechanisms in Hong Kong and Singapore: A Comparative Analysis. Journal of Property Investment & Finance, 22(1), 76–100. https://doi.org/10.1108/14635780410525153
  12. Dhingra, M., & Chattopadhyay, S. (2016). Advancing Smartness of Traditional Settlements-Case Analysis of Indian and Arab Old Cities. International Journal of Sustainable Built Environment, 5(2), 549–563. https://doi.org/10.1016/j.ijsbe.2016.08.004
  13. Enrique Silva, Barbara Scholz, and R. A. (2021). Planning and Financing Sustainable and Equitable Cities: Global Views on Land Value Capture (A 75th Anniversary Lincoln Institute Dialogue). Retrieved from https://www.lincolninst.edu/courses-events/courses/2021-planning-financing-sustainable-equitable-cities-global-views-land-value
  14. Flynn, M., Rao, A. K., & Gashi, D. S. (2018). Smart Cities Funding and Financing in Developing Economies Assisting Developing Cities to Finance Their Infrastructure Gap Through Private Sector Participation Approaches. Deloitte
  15. Gandhi, S., & Phatak, V. K. (2016). Land-Based Financing in Metropolitan Cities in India: The Case of Hyderabad and Mumbai. Urbanisation, 1(1), 31–52. https://doi.org/10.1177/2455747116644106
  16. Garza, N., & Gonzalez, I. (2021). An Urban System Assessment of Land Value Capture: The Colombian Case. Land Use Policy, 109(June), 105598. https://doi.org/10.1016/j.landusepol.2021.105598
  17. Goytia, C., & Cristini, M. (2020). Infrastructure Investment in a Messy Urban Growth Scenario: The Role of Land Value Capture Instruments in Argentina. (August), 49
  18. Hengstermann, A., & Götze, V. (2023). Planning-related Land Value Changes for Explaining Instruments of Compensation and Value Capture in Switzerland. Land Use Policy, 132. https://doi.org/10.1016/j.landusepol.2023.106826
  19. Hernandez, R. D. V. and, & Pallares, R. A. A. (2015). Financing Instruments for Smart City Projects Based on Internet of Things. Retrieved from https://www.politesi.polimi.it/bitstream/10589/116101/3/2015_12_ALBOR_DE VUONO.pdf
  20. Highways and Water Resources Office, G. of B. M. (2023). Highways and Water Resources Work Plan
  21. Höjer, M., & Wangel, J. (2014). Smart Sustainable Cities: Definition and Challenges. Advances in Intelligent Systems and Computing, 310(August), 333–349. https://doi.org/10.1007/978-3-319-09228-7_20
  22. Jinshuo Wang, D. Ary A. Samsura, E. van der K. (2019). Institutional Barriers to Financing Transit-Oriented Development in China: Analyzing Informal Land Value Capture Strategies (p. 10). p. 10
  23. Keeble, B. R. (1988). The Brundtland Report: “Our Common Future.” Medicine and War, 4(1), 17–25. https://doi.org/10.1080/07488008808408783
  24. Kiamba, A. (2012). The Sustainability of Urban Development in Developing Economies. Consilience: The Journal of Sustainale Development, 8(1), 20–25
  25. Korngold, G. (2022a). Land Value Capture in the United States
  26. Korngold, G. (2022b). Land Value Capture in the United States: Funding Infrastructure and Local Government Services (Lincoln Institute of Land Policy 2022). In SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4222377
  27. KPPIP. (2022). Laporan KPPIP Semester II 2022
  28. Kresse, K., Kang, M., Kim, S. Il, & Van Der Krabben, E. (2020). Value Capture Ideals and Practice – Development Stages and the Evolution of Value Capture Policies. Cities, 106(June). https://doi.org/10.1016/j.cities.2020.102861
  29. Li, X., & Love, P. E. D. (2022). Procuring Urban Rail Transit Infrastructure by Integrating Land Value Capture and Public-Private Partnerships: Learning from the Cities of Delhi and Hong Kong. Cities, 122(March 2021), 103545. https://doi.org/10.1016/j.cities.2021.103545
  30. Liu, X., & Xia, H. (2023). Networking and Sustainable Development of Urban Spatial Planning: Influence of Rail Transit. Sustainable Cities and Society, 99(April). https://doi.org/10.1016/j.scs.2023.104865
  31. Mahendra, A., King, R., Gray, E., Hart, M., Azeredo, L., Betti, L., … Ibrahim, A. (2020). Urban Land Value Capture in São Paulo, Addis Ababa, and Hyderabad: Differing Interpretations, Equity Impacts, and Enabling Conditions. World Resources Institute, (January). https://doi.org/10.46830/wriwp.18.00137
  32. McGaffin, R., Viruly, F., & Boyle, L. (2021). An investigation Into the Use of Land-Based Financing to Fund Infrastructure in South Africa. Journal of Property Investment and Finance, 39(3), 183–198. https://doi.org/10.1108/JPIF-02-2019-0016
  33. Mi Shih, Ying-Hui Chian, H. B. C. (2018). “Floating TDR” and Land Value Capture in Taiwan Designing a More Effective. Lincoln Institute of Land Policy, 16. Retrieved from https://www.lincolninst.edu/sites/default/files/pubfiles/2018_descriptive_floating_tdr_taiwan_shih_chiang_chang.pdf
  34. Nguyen, T. B., van der Krabben, E., Spencer, J. H., & Truong, K. T. (2017). Collaborative Development: Capturing the Public Value in Private Real Estate Development Projects in Ho Chi Minh City, Vietnam. Cities, 68(December 2016), 104–118. https://doi.org/10.1016/j.cities.2017.06.006
  35. Noring, L. (2021). From Vision to Value: A Case Study of How Seven Danish Cities Conduct Area Development to Propel Urban Revival. (June). Retrieved from https://research.cbs.dk/en/publications/from-vision-to-value-a-case-study-of-how-seven-danish-cities-cond
  36. Quan, X., & Solheim, M. C. W. (2023). Public-Private Partnerships in Smart Cities: A Critical Survey and Research Agenda. City, Culture and Society, 32(November 2022), 100491. https://doi.org/10.1016/j.ccs.2022.100491
  37. Rybeck, R. (2004). Using Value Capture to Finance Infrastructure and Encourage Compact Development. Public Works Management & Policy, 8(4), 249–260. https://doi.org/10.1177/1087724X03262828
  38. SGS Economic & Planning. (2016). Technical Paper on Value Capture. (September). Retrieved from http://infrastructureaustralia.gov.au/policy-publications/publications/files/SGS_Technical_paper_on_value_capture-September_2016.pdf
  39. Smolka, M. O. (2013). Implementing Value Capture in Latin America: Policies and Tools for Urban Development. In October (Vol. 2008). Retrieved from http://doi.wiley.com/10.1002/yd.282
  40. Smolka, M. O., & Amborski, D. (2000). Value Capture for Urban Development: An Inter-American Comparison. Lincoln Institute of Land Policy, 1–27
  41. Spatial Planning Office, G. of B. M. (2023). Spatial Planning Office Work Plan. Bekasi Municipality
  42. Suzuki, H., Murakami, J., Hong, Y.-H., & Tamayose, B. (2015). Financing Transit-Oriented Development with Land Values: Adapting Land Value Capture in Developing Countries. In World Bank Group. The World Bank. https://doi.org/10.1596/978-1-4648-0149-5
  43. Uitto, J. I. (2019). Sustainable Development Evaluation: Understanding the Nexus of Natural and Human Systems. New Directions for Evaluation, 2019(162), 49–67. https://doi.org/10.1002/ev.20364
  44. Wang, W., van Noorloos, F., & Spit, T. (2020). Stakeholder Power Relations in Land Value Capture: Comparing Public (China) and Private (U.S.) dominant regimes. Land Use Policy, 91(September 2019), 104357. https://doi.org/10.1016/j.landusepol.2019.104357
  45. Wang, Z., Lin, L., Zhang, B., Xu, H., Xue, J., Fu, Y., … Li, F. (2023). Sustainable Urban Development Based on An Adaptive Cycle Model: A Coupled Social and Ecological Land Use Development Model. Ecological Indicators, 154(63). https://doi.org/10.1016/j.ecolind.2023.110666
  46. Xiao, Y., & Watson, M. (2017). Guidance on Conducting a Systematic Literature Review. Journal of Planning Education and Research, 39(1), 93–112. https://doi.org/10.1177/0739456X17723971
  47. Yen, B. T. H., Feng, C. M., & Lee, T. C. (2023). Transit-Oriented Development Strategy in Taiwan: An Application of Land Value Capture. Asian Transport Studies, 9(December 2020), 100094. https://doi.org/10.1016/j.eastsj.2022.100094

Last update:

No citation recorded.

Last update:

No citation recorded.