This paper presents analysis of the fiscal and equity impacts of urban land value capture instruments based on three case studies from the global south. These include the Lideta redevelopment in Addis Ababa, Ethiopia; the Outer Ring Road in Hyderabad, India; and Água Espraiada Urban Operation in São Paulo, Brazil. It combines desk research with interviews of local key informants with deep knowledge of the policy and market dynamics in the three cities and representing different perspectives. The analysis highlights the relevance of legal and planning processes (especially with respect to land tenure), available financial instruments, real estate market conditions and dynamics, and government capacity in both design and implementation of LVC. The cases show the importance of the following enabling factors as key to implementing LVC in an equitable manner: planning for equitable financing and risk mitigation from the beginning and not during or after implementation; transparent valuation based on updated property cadasters; the importance of capacity building, integrated planning, long term vision and political support, and shared responsibility and trust between public and private actors.

The Government of Karnataka and Bangalore Metro Rail Corporation Limited are exploring ways to offset the heavy economic burden of expanding the metro rail transit network in Bengaluru. Land value capture (LVC) is a public financing strategy that can recover a portion of the real estate value that development along the metro corridor generates for private property owners. Deployed effectively, LVC can help fund the growth of mass transit and allied infrastructure. Several LVC mechanisms are under consideration in Bengaluru, but are yet to be implemented. Inherent shortcomings in planning, policy, and institutional frameworks prevent the market from optimizing the benefits of transit-oriented development (TOD), which in turn negatively impacts LVC. In this practice note, we first evaluate and assess the potential for TOD and LVC to evolve in tandem with specific reference to the Bengaluru metro and, second, posit strategies and recommendations to reorient policies to leverage TOD as an opportunity for LVC, and vice versa. Our learnings are illustrated through case studies of two typical metro stations – an inner-city neighborhood and an upcoming area in the periphery of the city.

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