Financing Transit Oriented Development in Chinese cities by Value Capture: Negotiating Better Public Infrastructure

Speaker: Prof. Erwin van der Krabben, Professor of Urban Planning and Property Development, Radboud University

THE SPEAKER

Prof. Erwin van der Krabben is a Professor of Urban Planning and Property Development at the Radboud University.  He is also a Visiting Professor in the Department of Real Estate and Construction and Department of Planning and Urban Design at HKU.  He is a leading international scholar on transit-oriented development, land readjustment, value capture and developer’s obligations etc.  Professionally, Prof. Erwin Van der Krabben regularly advices to local, regional and national authorities on land policy, value capturing and transit oriented developments and is frequently invited to address both national and international audiences (industry and government) on topics like value capturing and transit oriented developments. Currently he participates in a national think tank to the Minister of Planning, to explore solutions and new approaches to land and real estate development.

ABSTRACT

A recent World Bank report warns of the increasing problems of car-dependent urbanization (Suzuki et al., 2015), particularly in rapidly growing cities in developing countries. The integration of transport and urban development at public transport nodes and networks, or ‘Transit-Oriented urban Development’ (TOD) is a popular strategy that potentially contributes to sustainable urban development. Financing of TOD strategies in Chinese cities and elsewhere is often based on some sort of value capture mechanism. Partly as a response to the current transitional context, many Chinese cities often make use of innovative but informal land value capture instruments to meet the demand of public infrastructure, finding ways to bypass formal procedures underlying processes of land leasing. Informality has become an effective strategy by public sectors in China to deal effectively with changing situations (Webster et al., 2016). However, Kreibich (2012) explains that informality might be the symbol of public authorities’ inability to regulate and guide rapid urban growth, and the gap left has to be filled by informal institutions. Therefore, it is important to identify the origin and effect of informality in order to figure out possible ways to cope with these challenges.

In this lecture, Prof. Erwin van der Krabben will discuss the effectiveness of innovative but informal value capture mechanisms recently introduced in some Chinese cities (and based on Hong Kong’s rail + property model). Based on stakeholder interviews, two focus group discussions and a game simulation, the informality (and related problems) in land development policies and negotiations will be depicted with respect to developer contributions in Chinese cities and suggest some possible ways to create a more transparent and effective value capture mechanism.

*This work is the result of a fellowship funded by the Lincoln Institute of Land Policy.