The growing population and traffic congestion in metropolitan areas are increasing the need for sustainable transportation solutions. But how can we finance these solutions?
According to Görkem Öğüt from Endeksa in Hürriyet Daily News, “House rents close to public transport skyrocket in Istanbul”. This highlights the importance of mass and green transportation in cities and shows the potential of value capture (VC) and property taxes (PT) to generate resources for both people and the environment.
What are Value Capture (VC) and Property Taxes (PT)?
Value capture is a mechanism that allows for a share of the increase in property values resulting from public investment. Property taxes are recurring taxes levied on property owners.
“We must work together to ensure the equitable distribution of wealth, opportunity, and power in our society.”
Nelson Mandela
Why Should We Use VC&PT?
People pay various taxes, such as VAT and income tax. However, those whose property values increase due to public investment often benefit without paying additional taxes on this increase. This hinders fair resource distribution and exacerbates inequalities.
In his report “Implementing Value Capture in Latin America: Policies and Tools for Urban Development”, Martim Smolka from the Lincoln Institute of Land Policy explains the benefits of VC&PT:
“Value capture instruments that charge for building rights have provided partial or full funding for major urban redevelopment projects in many cities. As a result, resources can be transferred from public infrastructure budgets for other social sectors (e.g., education, health, and housing) that in the past would have been sacrificed because of overall constraints on public expenditures…”
Smolka also outlines key steps for effective implementation of VC&PT:
- Understanding land market conditions
- Comprehensive property monitoring systems
- Fluid dialogue between fiscal, planning, and judicial entities
- Political resolve of local government leaders
This post aims to raise awareness about financing sustainable transportation through value capture and property taxes.
1 Comment
Yiğit Belin
Let’s see how it will occur Value Capture!
The stations on the route of the high-speed train line from Ankara to Samsun have also been clarified. According to the map announced by the Ministry of Transportation and Infrastructure, the stations on the line will be as follows:
Delice
Sungurlu
Çorum OSB
Çorum Mecitözü
Merzifon
Havza
Kavak
Samsun