Some practical policies

Unlocking the potential for the city’s most valuable asset entails addressing dysfunctional land markets, realistic planning, and using appropriate instruments for capturing rising land values for the public good. Below are four key policies which can enable cities to use their land more effectively.

  1. Large scale, participatory land registration schemes significantly reduce the cost of moving towards formalised tenure. City authorities can learn from the successes of other programmes in establishing land rights that are secure, marketable, and enforceable.
  2. Forward-looking and realistic plans, backed by anchoring infrastructure investments, establish the coordination required for well-functioning cities. Without such coordination, firms do not cluster and settlement sprawls.
  3. Policymakers should be careful of imposing excessively stringent land use regulations, which can have severe unintended consequences on house prices and push ordinary residents into informal housing. By revising these, city authorities can bring households into the formal sector at limited costs.
  4. Land value capture is a means for urbanisation to finance itself. Public ownership of land and taxation of private ownership are both useful and legitimate means of achieving this.